The Forgotten Four – Taxes Your Accountant Didn’t File and You Didn’t Pay

Running a thriving business demands more than just drive; there are a multitude of responsibilities that pull business owners in every direction. Overlooking lesser-known taxes that lurk in the shadows could cost you dearly. Here we unveil four often-neglected taxes that our expert team can help you conquer, ensuring your business thrives.

1. Delaware Gross Receipts Taxes:

Unlike a traditional sales tax, this tax is based on your business’s total revenue and not its profits. It affects entities conducting business in the state, irrespective of where they physically are based. If you failed to account for Delaware Gross Receipts Taxes, you might be facing hefty penalties and interest charges. The tax is usually less than 1% and some deductions apply, but don’t forget this tax.

2. Passthrough Entity Taxes:

Passthrough entities, such as partnerships and S corporations, are popular choices for their tax advantages. However, many states impose quarterly and annual taxes at the business level if they are operating in multiple states or have owners that live in different states. Your accountant might have missed this tax if they are not familiar with the states in which you are operating, if owners move during the year, or if you have expanded into a new state.

3. Delaware Franchise Taxes:

Whether you’re just registered in Delaware or you’re physically located in the state, you’re subject to annual Franchise Taxes. These taxes vary based on your company’s authorized shares and par value. If your accountant overlooked these taxes, you might find yourself facing penalties and potential legal consequences. Most businesses pay less than $500 for the Franchise Tax filing, but miss the deadline by one day and the penalties start at $200 plus interest. Fail to file and/or pay for long enough and the legal standing of your company is at risk.

4. Annual Reports for PA, NJ & MD:

If your business operates across multiple states, you need to stay on top of annual report filings. Pennsylvania, New Jersey, and Maryland, for instance, require businesses to submit annual reports to maintain their good standing. Failing to file these reports can lead to administrative dissolution and loss of your company’s legal protections. Trust us to handle the administrative nuances, ensuring your business maintains its legal standing and can focus on what truly matters – growth.

As a business owner, educating yourself about these often-overlooked taxes is an essential step in safeguarding your company’s financial health. By proactively addressing these tax liabilities, you will have more cash flow to fuel your business’s growth (instead of penalties and interest).

From Middletown to the broader business landscape, at SC Associates our passion extends beyond traditional accounting services. We’re your strategic partners, focusing on our client relationships all year with outsourced accounting, CFO and business coaching services as well as in-depth tax planning.

SC Associates – where the art of management meets the science of accounting.
651 N. Broad St. Ste. 103 Middletown, DE
302.454.1100
scassoc.net

Written by Sharron Cirillo