Haven’t Filed Your Business Taxes for Years? What’s the Best Way to Catch Up?

Business owners wear many hats, and that means that things can fall through the cracks - i.e tax filings. However, business unfiled tax returns are not something to leave unattended. Here’s a calm, practical path for Maryland businesses, such as LLCs taxed as S corporations, partnerships, and Schedule C service businesses, to get back into compliance.

1) Start with records and the current year

• Pull bank statements, 1099s, payroll reports, and sales and use tax filings. It's important that you have accurate financial reports; otherwise, you may risk missing out on deductions. Work with a professional accountant to help you generate clean, accurate books via a professional back-up or clean-up bookkeeping service.

• File the current year as soon as possible to stop new penalties from adding up.

2) How many years should you file?

• Federal income tax: The IRS often expects up to six years of back returns to restore compliance, though the exact lookback can vary based on your situation.

• Maryland: If returns weren’t filed, the state can assess without a time limit. However, voluntary disclosure options may limit lookback for certain taxes (commonly sales/use, etc). Don’t assume; get guidance first.

• Priority order: this is important to assess early on and should be handled by a tax professional. Aventa Tax, for example, can request IRS transcripts, map out the precise years required, and sequence filings to minimize penalties and cash strain.

3) What penalties and interest to expect

• Income tax: Expect separate failure-to-file and failure-to-pay penalties plus daily interest. Partnerships and S corporations can face per-owner, per-month late-filing penalties even when no tax is due.

• Sales and payroll: Sales/use and payroll tax penalties add up quickly and can be steeper than income tax. Address these early.

• Relief: First-time abatement or reasonable-cause relief may reduce penalties. If you owe, installment agreements are common - though there may be other options available. Aventa Tax prepares the filings, pursues penalty relief, and can set up payment plans so you can focus on the business.

4) Call a tax professional—or the IRS?

• Speak with a professional before contacting the IRS or Maryland. Going in without a plan can trigger tight deadlines and missed relief opportunities.

• As a small business accountant in Germantown Maryland, Aventa Tax represents service businesses, contractors, consultants, medical practices, and other service-based businesses in Montgomery County, Maryland and surrounding areas. We provide IRS and state notice help, coordinate voluntary disclosures when appropriate, and deliver practical next steps you can execute now.

How Aventa Tax helps local owners get current

• Year-round business tax preparation and planning for S corporations, partnerships, and Schedule C filers. Aventa Tax offers Maryland small business tax preparation year-round for S corporations (1120-S + MD Form 510), partnerships (1065 + MD Form 510), and Schedule C filers (federal Schedule C with MD Form 502).

• Bookkeeping support using cloud tools like QuickBooks and Xero to reconstruct missing years, helping to ensure you do not overpay in taxes.

• Startup and entity guidance so your Maryland structure (LLC, S corporation, partnership) avoids future surprises.

• Straightforward, local help for Maryland small business tax preparation and ongoing compliance.

If you need business tax services in Montgomery County Maryland and you’re behind on filings, Aventa Tax will build a catch-up plan, file the right years, and handle the IRS and Maryland so you can move forward. To get started, call 301-235-2724 or learn more about our business tax resolution services and our clean-up bookkeeping options.

Disclaimer: This information is for educational purposes only. Please consult a tax professional for specific advice on your situation.