Connect with us

Finance

5 Tips to Avoid Federal Tax Penalty For Taxpayers

5 Tips to Avoid Federal Tax Penalty For Taxpayers

When you are undergoing a tax issue, then it is vital to have knowledge of what are you up against and what can you do to make things right? If the issue is related to taxes then a tax professional can help you with his experienced advice and help you resolve the issue in a timely manner. Tax filing is not easy to process and mistakes can lead to penalties. Penalties can be harsh and difficult to deal with.  You need a plan and expert suggestions to get out of this situation as soon as possible.

Now let’s take a look at what is the tax penalty? A tax penalty is disciplinary action taken by IRS if you have misfiled your returns, or the details are not accurate. Tax penalties have different kinds and there are a lot of ways to solve each one of them. If you are fully knowledgeable about tax laws and the functioning of the IRS, then you can handle it yourself. But if you are not skillful, then you should get professional help to get the issue resolve. His/her advice will help you make things afloat and help you get back on track.

So, now we know why penalties are imposed. Let us take a look at the type of penalties people have to deal with. There are more than 142 tax penalty kinds. If you have a tax issue then, it’s possible that you have one or more issues with your tax return that is why you are facing a penalty.  Below are some of the reasons why penalties are imposed on taxpayers.

  • Providing Wrong Information
  • Bogus Returns
  • Less Payment
  • Missing payments
  • Return after the due date

If you do not want to deal with penalties this article is for you. You can avoid it by being careful, attentive, and recording small details of your finances, keeping track of all financial activities happening in your workplace. However, there are few things that help you avoid or reduce these penalties some of them are written below.

1. File on Time

Always file your taxes on time. If you cannot file your taxes on time, then IRS will penalize you. The amount is 25% of what you owe. If you are not able to file your taxes then you file an extension with form 4858. In this way, you will get more time to prepare your taxes and you will also be saved from the tax penalty.

2. Payment Plan

Ask for a payment plan if you find that you do not have enough money to pay in full. This is something that most people fail to notice because they think the IRS does not allow installments. Don’t be so stupid! You can also request the payment plan if you find that you cannot pay in time. IRS allows the taxpayer to

Pay in the span of months, instead of one complete payment. This way you will not feel the burden to pay the entire amount all at once.

3. Abatement

Penalty abatement is a good way to revoke the penalty. You need to have a genuine reason why you were not able to pay your taxes in time to have the penalty removed. Such reasonable cause includes sudden accidents that took place like a death in the family, health problem, unemployment, etc.

4. Professional Help

Getting professional help is also a good idea. There are something’s that we will always miss when filing a tax return, professional help is necessary to file your documents accurately. There are many firms that have a lot of experience behind their back and can help you in a number of ways.

5. Late Filing Penalty for Tax Returns

April 15 is the deadline to submit your tax returns. The deadline is not the same for everyone. For instance, many corporations and organizations have a deadline of March 15. If you are late, on your return, you will have to pay the penalty of 5% and if your returns are late 60 days, the penalty is huge. So, if you want to save yourself from a late filing penalty you need to send all your tax returns before the due date to get in the safe zone. The only solution to save you from a late filing penalty is getting a tax extension.

Conclusion

There are few things that you should keep in mind to save yourself from a penalty. Even if you are hit by a penalty, you can take many actions to minimize or avoid the penalty. For instance, if you miss on deadline or another important metric you can save yourself by showing the reason behind it, a rational reason. You can also claim abatement as mentioned in the article.

Plan everything before the due date and make preparation starting from now, in this way you will be prepared when the moment arrives. SNG INC CPA provides Dallas tax services. Our experts can make the process of tax preparation and account simple and easy for you. With our deeply knowledgeable and skilled team, we can deliver the best possible solutions for your accounting needs.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Posts

Health1 hour ago

Simple Ways To Feel More Confident At The Gym

If you are new to the gym, or you haven’t been in a while, sometimes you might not feel completely...

Business5 days ago

Can You Use Residential Property for Commercial Use

Having extra income, constantly flowing in can make all the difference in the current economy. Getting creative with how you...

What Do Business Consultants Do What Do Business Consultants Do
Business2 weeks ago

Running a Business? How to Minimize Supply Chain Issues

Supply chain issues have always been an issue for businesses but over the last few years, the effect and widespread...

Home Improvement3 weeks ago

How to Increase Your House Value Before Selling

Increasing home value is the first step to making your place more attractive for future buyers. Whether you are trying...

General4 weeks ago

Why Calorie Control Is Still The Best Way To Diet

There are a great deal of different options when it comes to dieting, every day there seems to be a...

The Benefits Of Trade Credit Insurance For Your Business The Benefits Of Trade Credit Insurance For Your Business
Business1 month ago

The Benefits Of Trade Credit Insurance For Your Business

Trade credit insurance provides cover for businesses who trade on a credit basis. If the people who owe money for...

5 Charming Restaurant Decor Ideas In 2022 5 Charming Restaurant Decor Ideas In 2022
Miscellaneous1 month ago

5 Charming Restaurant Decor Ideas In 2022

Making your restaurant memorable and stand out is a feat worthy of praise. The sheer pressure of wanting to succeed...

Bank Won't Fund Your Business? 4 Loan Alternatives To Get You Started Bank Won't Fund Your Business? 4 Loan Alternatives To Get You Started
Business2 months ago

Bank Won’t Fund Your Business? 4 Loan Alternatives To Get You Started

Businesses typically require some sort of collateral or proof of concept before funding their business venture. However, it is possible...

Planning A Stag Do Planning A Stag Do
Miscellaneous2 months ago

Planning A Stag Do

If you’re a Best Man then you’re in a unique position of responsibility, and before the day itself when you’ll...

Tips to Reduce Eczema Flare-Ups Tips to Reduce Eczema Flare-Ups
Health2 months ago

What Triggers Eczema | Tips to Reduce Eczema Flare-Ups

Eczema is a skin condition that can induce redness, itchiness, and skin inflammation. Its root cause is not fully understood,...

Women's Fashion Trends To Expect In 2022 Women's Fashion Trends To Expect In 2022
Lifestyle3 months ago

Women’s Fashion Trends To Expect In 2022

A new year means new fashion trends. We cannot wait for what is in store in 2022. It seems that...

Home Makeover Trends: Insights from The Pros Home Makeover Trends: Insights from The Pros
Home Improvement3 months ago

Home Makeover Trends: Insights from The Pros

Are you considering a home makeover but don’t know where to start? You’re in luck! In this article, we will...

Interior Design Trends 2022 Interior Design Trends 2022
Home Improvement3 months ago

Interior Design Trends 2022

We all spend time pining over other people’s interior’s on Pinterest or Instagram, but with these trends, it’s easy to...

Top Commonly Overlooked Car Maintenance and Repairs Top Commonly Overlooked Car Maintenance and Repairs
General3 months ago

Top Commonly Overlooked Car Maintenance and Repairs

Maintaining a car is a huge responsibility. There’s a lot that goes into that given how complicated a machine it...

What Is The Difference Between Strata and Property Manager What Is The Difference Between Strata and Property Manager
General4 months ago

What Is The Difference Between Strata and Property Manager

Real estate is a diverse market, and as such, it can be hard to determine the differences between various types...

Categories

Archives

Trending