The deadline for filing 2020 extended corporate and partnership tax returns is April 15, 2021.
If you took an extension to file your corporate or partnership income tax returns, the deadline is almost here. By Tuesday, you must finish and file your return or face penalties for late filing.
What if you’re still missing that last piece of information?
Do your best to get it, but if that’s not possible make a good estimate and file anyway. You can always amend your return if necessary, which is a better alternative than getting hit with a penalty for missing the deadline.
In addition, you need to file your business returns so you and other partners or shareholders in the company can use the information to file individual tax returns.
Gather what you need
Preparing your return will be easier and more efficient if you don’t have to repeatedly stop to look for necessary information.
Make sure you have the following items before you start preparing your business return (download the 1120, 1120s, or 1065 tax return checklist):
- Last year’s business tax returns, unless this is a new business
- Financial statements: income statement and balance sheet
- Transaction history and summary statement of shareholders’ capital accounts
- Shareholder information, including names, current addresses, and Social Security numbers.
- Payroll tax returns or summaries
- Form W-2 statements
- Sales tax returns
- Records of federal, state, and local taxes paid
- Business tax preparation software
Grouping and putting your information in order makes it a lot easier to answer the questions TaxAct will ask as you move through the program.
TaxAct prompts you for required information and helps identify every tax benefit to which you are entitled.
Keep your last year’s business tax return handy for reference. The answers to many questions, such as business codes, are the same from year to year.
In addition, it’s important that the amounts of beginning assets, liabilities, and shareholder or partner accounts on your return match the ending amounts on last year’s return.
Keep good notes as you prepare your business return
Keep in mind that there may be many occasions when you need to remember how you arrived at a particular amount or the details around other information on your return.
Keeping detailed notes as you prepare your return can save you time later. For example, you may need supporting information when you prepare next year’s return or if you sell a business asset.
As you prepare your return, take note of things like how you allocated expenses between business and personal use, additional expenses, and differences between financial statements and your tax return.
Print your notes if necessary, and keep them for as long as you save the related tax returns.
Read and review your return
When you think you’re done, read the entire return one more time. (It may be easier to read your return if you print it first.) Don’t skip this step – it’s vital to make sure you file a complete and correct business tax return.
It’s tempting to file without reading and reviewing your return.
However, reading your return accomplishes two very important things. It helps you understand your business tax return, including your overall business success and how various items, such as depreciation, affect your tax bill.
It also makes it easy to identify any missing information or anything that doesn’t look quite right.
If you don’t trust that you’ll catch everything by doing a manual review, be sure to take advantage of the TaxAct Alerts feature.
Alerts can identify missing or incomplete information that may bring your return to the attention of the IRS. Plus, you’ll be alerted to possible tax saving opportunities that you may have missed.
Following these tips to prepare and file your business tax return should help you get it out the door before the extension deadline. Better yet, now that you’re organized and are keeping good notes, next year’s taxes should be easier.
From now on, you may be able to file your business returns earlier in the year – perhaps without needing an extension at all.