Paying taxes timely and filing the return regularly is important in some manners.
Like any tax that is not paid on time, the income tax return also has economic and tax implications, in case you do not file it when you owe.
But it is not possible to maintain a certain flow in taxpaying. So, what are the possible inconveniences that a taxpayer may face? Sometimes the taxpayer thinks that it is well enough not to file the information and tax return as he or she is unable. This is surely not a wise option. The IRS asks for the updated data to make sure that you are still liable to them. Here are some key points following that describes the matter in a very easy to understand tone.
Failure to pay taxes or filing tax returns on time can have very serious and alarming consequences. In addition, people who do not file returns or pay their taxes in time may receive significant financial penalties under current law. Those who make the presentations or pay their taxes late, may receive fines for non-payment or submission. In general terms, fines related to non-compliance with presentation are more serious than those related to non-payment. Therefore, if you can not pay all the taxes you owe, you should file your tax returns and pay the highest amount you can.
This will allow you to avoid more severe penalties that are related to non-compliance with presentation. The Internal Revenue Service (IRS) will help people who can not pay their taxes and even create a payment plan that helps them pay off their tax debts over a period of time.
Submit your statement even if you can not afford it. In most cases, the fine for not filing your taxes is 10 times higher than the fine for not paying. So if you can not pay taxes in full, you must file your tax return and pay as much as you can.
Use IRS Direct Pay to pay your taxes directly from your checking account or savings account. You can try other payment options, such as loans or pay with debit or credit card. The IRS can work with you to help resolve your tax liability. Most people can set up a payment agreement with the IRS using the IRS Online Payment Agreement tool.
Late payment penalty may not apply. If you applied for an extension of time to file your tax return before the deadline to pay your taxes and pay at least 90% of the taxes you owe, you may not have to pay the late payment penalty. However, you must pay the remaining balance by the extended deadline. You will have to pay interest on the taxes you paid after the expiration date that is April 15.
There is no fine if you have a reasonable cause. You will not have to pay a fine for filing your return or not paying your taxes in time if you file a reasonable cause.
The concept of filing the return timing is important.
The reason is that it makes sure that CPA firms can take over the responsibility to explain the unexpected problem. If it is possible, then first you should calculate the amount of total taxes and return. As the percentage of the total amount is crucial, pay this to the tax department to convince that you will pay the rest as soon as possible. In the case you forget to do so, the following penalties can affect your balance sheet a bit.
Penalty for Filing Failure means that you are late in updating the proper information to the tax department as well as the IRS. They will charge five percent of the amount per month. Another Payment failure penalty is also considered for the late payers. You will be charged maximum 20% on the due payment.
If you forget the both procedures, then the department will charge on these two failures and a huge some of money will be deducted from your balance sheet. There is also an interest rate on the unpaid taxes like the banks. So, you will need to deal more delicately.
You can easily borrow money from banks or individuals and pay the taxes to save extra penalty. The communities and credit union also offer loans for the purpose.
There are some companies who offer their credit card to pay your taxes on time.
Of course the interest rate is a bit higher. But it will save the hamper to consult an attorney for late paying penalties.
The last but not the least formula is the last chance for the late payer. An agreement on paying the tax on monthly installment is surely a better option. These steps will save you money and penalties for paying taxes lately.
Get help paying taxes owed.
Consultation with an experienced tax lawyer can be very helpful to those who owe taxes. An attorney can help you assess your situation and determine if you can reduce your final tax debt. If, based on the financial analysis, it is determined that a reduction of your tax obligations is lawful, this will also allow you to reduce any late payment penalty.
Cancellation of tax penalties.
If you can prove that the default of payment or tax presentation had a legitimate justification, you will be able to request the exoneration of the fines and penalties for late payment. Otherwise, the court will consider that noncompliance with the tax codes has been an intentional negligence, and you must pay the corresponding fees.
There are many reasons why a person could default on their tax obligations. Unfortunately, in cases where a person did not make a presentation for convenience or lack of understanding of the legal provisions, the IRS will not take into account these reasons to grant exemption from the payment of fines.
Fines and penalties related to non-payment or filing of tax returns can accumulate quickly. That is why those who delay in paying taxes will want to solve the problem as quickly as possible.