Businesses should not take corporate tax returns lightly, as they can contain important information that can be used to their advantage. A well-executed corporate tax return can help a business improve its overall image, increase shareholder value, and attract new customers. However, companies should not rely solely on their corporate tax returns to make decisions about their business; instead, they should also use other data sources to supplement what is found in their tax return.
A recent accounting firm EY study found that corporate tax filing errors can lead to legally-binding penalties and even criminal charges. Here are some of the key reasons why businesses should take their tax returns seriously:
- Corporate tax returns are legal documents. As a result, making mistakes can lead to penalties and fines from the IRS, which can be very costly for a business.
- Corporate tax returns determine an entity’s taxable income and potential liabilities. If an entity incorrectly calculates its taxes, it could end up owing money to the IRS later. This could potentially damage the business’ reputation and result in lost revenue.
Benefits of Hiring Professionals For Corporate Tax Returns
- Hiring professionals to help with your corporate tax return can save you time and money.
- They will be familiar with the latest tax laws and will be able to help you prepare your return quickly and efficiently.
- Professionals can also provide tips and advice on how to optimize your tax situation, which could lead to savings in the long run.
- Having a professional handle your return can give you peace of mind, knowing that your information is being handled correctly and completely.
- Finally, hiring a professional may also result in a lower overall cost of preparing your return than doing it on your own. So if you have the time and resources available, by all means, go ahead and hire one!
Common Mistakes to Avoid
Whether preparing your own return or working with an accountant, it’s important to avoid common mistakes when filing your corporate tax return. Here are a few to keep in mind:
- Filing late – In order to get a full refund of the federal income taxes you paid, you must file your return by April 15th of the following year. If you file after this date, you may only be able to receive a partial refund.
- Not including all income – You may be entitled to deduct certain business expenses on your return, such as travel costs and advertising expenses. Make sure that you include all income and expenses on your return so that you can calculate the correct amount of tax due.
- underreporting income – It’s illegal to underreport your income on your return in order to reduce the amount of tax that you owe.