Running a business can get hectic, but it is important that corporations keep up with filing deadlines and paying their taxes. Corporations must make periodic estimated tax payments to the IRS in order to comply with tax rules. Also, due to their ability to select a fiscal year, corporations may have different filing deadlines than other firms who are on a calendar year.
Thankfully, the IRS has made things convenient in meeting estimated tax payment requirements by making the Electronic Federal Tax Payment System (EFTPS) available to corporations paying their estimated tax payments. Check out our previous article for more info on how to sign up for it.
Submitting the paperwork
Most corporations use Form 1120 to file their taxes with the IRS. Form 1120 can also be e-filed, and certain corporations with assets of at least $10M and file 250 returns (as in, returns for employees) must use E-File.
Penalties
Failing to make timely tax payments can incur penalties in addition to what a corporation will owe. For example, late filings get penalized 5% of the unpaid tax for each month the return is late up to a maximum of 25% of the unpaid tax. A late payment of tax may be penalized half of 1% of the unpaid tax for each month the tax is not paid also to a maximum of 25% of the unpaid tax. However, if a corporation can substantially prove a reasonable cause for not making timely payments, the penalties may be waived.
Keeping up with corporate taxes is important for a business, but having a team manage the finer details of the accounting going into the corporate taxes can free up a business to focus on growth. MiklosCPA has helped many small to mid-sized businesses with their tax and accounting needs using our “virtual office” services. Feel free to reach out to us to learn more of our services. Also follow us on our socialmediapages for more future “good to know” articles.
Nowadays you can do almost anything online, and that includes paying your taxes too! The US Department of Treasury has set up the Electronic Federal Tax Payment System (EFTPS), a free service to taxpayers who wish to pay their taxes to the IRS online.
Enrollment in EFTPS
Enrolling is a fairly straightforward procedure. You can either do it online or by phone. Once you have gone through the prompts and enrolled, you will receive a PIN number which you will use to log in and begin scheduling payments. Expats and other international taxpayers can also enroll with EFTPS, making it more convenient than having to mail tax forms from the other side of the world.
Scheduled Payments with EFTPS
While EFTPS is a convenient system, it is still the taxpayer’s responsibility to set up and initiate tax payments properly. Tax payments must be submitted to EFTPS by 8PM EST at least one calendar day before the tax due date. Taxpayers also need to make sure the appropriate funds are in the bank account designated for EFTPS payments. Taxpayers can check the status of payments made, schedule payments up to 365 days in advance, and can even schedule regular payments as weekly, biweekly, monthly, or quarterly payments. It is a fairly useful service for corporations who need to provide quarterly estimated payments. Payments can be canceled as well, however must do so by 11:59PM EST at least two business days before the tax due date.
If you have a payroll service that makes tax payments on your company’s behalf, you can still enroll with EFTPS. It is a useful way to make sure tax payments have been processed. It also provides some flexibility in case you may have to change payroll service companies in the future and will still have access to EFTPS.
With the convenience of online tax payments, business owners can save time and focus on other matters. Of course, the preparation of the taxes can be another issue, unless you have a proper supporting team for that as well. Which is where we can come in. MiklosCPA helps businesses with their back-room accounting and taxation needs, such as setting up EFTPS for your business and preparing the appropriate quarterly payments. If you would like to learn more about our services, please contact us. Also, follow us on our social media pages for future tax tip articles like this one!
Our Firm
MiklosCPA is a top-rated cloud-based Certified Public Accounting firm in Los Angeles, Orange County, California serving small businesses and start-ups.
