The countdown is on! Only a few days left until April 15, the deadline for filing individual income tax returns, which includes Schedule C for sole proprietors. If your business is incorporated or an LLC electing corporate tax treatment, your due date was March 15. If your corporation filed an extension the due date is now September 15. Sole proprietors filing an extension face a due date of October 15.
Bear in mind that regardless of what type of entity your business is established under, an extension to file tax returns is not an extension of time to pay. Therefore, if you anticipate a tax liability, it is important that you remit payment with the extension form.
Depending upon the state in which your corporation does business, a minimum estimated tax payment for the current year is also likely due on April 15. Check with your tax pro or your state taxing agency to determine if this is a requirement and to find out how much to pay.
Sole proprietors and partners in a partnership must pay the first installment of federal and state (if applicable) 2014 estimated tax payments on April 15 as well.
But what if you don’t have enough cash on hand to do both?
If you are unable to meet your 2013 liability and make the first installment of the 2014 estimated, I encourage you to give the 2013 liability priority. The penalties are not as harsh for failure to prepay a current estimated payment as they are for failure to pay the prior year liability. You have the remainder of the year to catch up.
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