You need historical bookkeeping if you have yet to file taxes for many years. It will benefit your business by getting caught up on the bookkeeping, and here are the reasons:
- With bookkeeping, you meet record-keeping requirements of IRS:
To ensure accuracy in federal income tax filing, the IRS needs businesses to keep records of their income and deductions when they decide to update their bookkeeping. Organizing your income and expenses will help you determine your taxable income while filing your taxes. It will also help the IRS review and approve the tax form.
- Maximize deductions and lower your tax bill:
If you want to reduce your tax bill, you have to maximize your deduction, and when that returns are not filed, the IRS will send you a notice informing you that the IRS hasn’t got your tax return, and eventually, they would file a Substitute for Return for you. As the IRS doesn’t have any other business information, like deductible business expenses, charitable contributions, or other tax write-offs, you might owe more when calculated.
Thus, your business would suffer from a loss. So, by keeping your books up-to-date and recording all the deductibles, your tax bill will be reduced. If you have historical bookkeeping, it can support you against the hefty bill that the IRS can send after filling an SFR, and you can negotiate tax liability.
- Support the need for an Offer in Compromise:
You might need an Offer in Compromise if you have gone through tax debt and have yet to pay it. IRS offers OIC settlement to taxpayers who cannot pay their unpaid taxes. Your final situation will be reviewed if you offer how much you can afford to pay and provide detailed financial information. Only then will the offer be accepted if you meet the criteria.
You must review the historical bookkeeping to avoid paying your total tax bill. Your offer will only be considered if you have filed all pending tax returns. To complete your OIC application, you need to do your bookkeeping. You can contact a CPA or tax attorney to help you apply for OIC, and getting caught up on bookkeeping would be the first step on unfiled returns.
- Why has the ISR yet to reach out?
Suppose you have had an unfulfilled tax return for several years, and the ISR has yet to reach out. In that case, the pandemic worsened, causing delays in processing returns and purchasing collections. To avoid scrambling at the last minute, you must update your books through soundadvicebookkeeping.com.
- How to get caught up in historical bookkeeping?
Catching up can be a daunting experience if you need to catch up on your bookkeeping, but plenty of other resources can help you get caught up. With the help of expert bookkeepers, you can complete years of pending bookkeeping. Even if you have missing documents, the professional bookkeeper can help you file returns for previous tax years.
Summing it up:
Don’t waste any more time. Contact expert service providers and ask them to look into the matter. The sooner it is updated, the better it is for you!