Various Helpful Ways On How To Avoid IRS Penalties
Tax time is stressful enough without having to worry about any IRS penalties that may be incurred for one reason or other. These penalties can be anything from large sums of money to imprisonment. To get you through tax time penalty-free, here are a few things to keep in mind that can help.
The most obvious and easiest thing is to make sure you file your tax return on time. Even if you do not have the money to pay any taxes that you owe, that return needs to be in when it is due. If you are more than sixty days late, you will face a penalty.
There are times when something does happen that prevents you from filing on time. If you find yourself in that situation, you can request an extension to avoid the late filing fees. You can get an automatic extension until October, giving you plenty of time to get things in order and then file.
Paying what you owe on time is just as important as filing on time. Of course, this isn't always possible, but you cannot avoid paying. As long as you send in ninety percent of what you owe when you file, you avoid penalties. If you do not send in anything, then five percent is added to those unpaid taxes each month you do not pay, and if the IRS discovers this before you do pay, that penalty can increase.
There are times when you absolutely cannot pay your taxes, not even the ninety percent. In that case, you can request an installment agreement through the IRS. This will allow you to make monthly payments on what you owe. Although in most cases you will still have penalties for failure to pay, but they could be reduced by half when you have an agreement.
Besides filing and paying on time, auditing is another way to receive unwanted penalties. If the IRS notices any discrepancies or suspects you have not exactly been honest on your returns, they can audit you. That is why it is important to keep accurate and honest records. Do not exaggerate deductions and expenses on your returns.
There are a few ways to get your penalties reduced or removed, if you have a very good reason to request so. The IRS will accept several reasons to do this because of late filing or underpayment. However, you will need to be prepared to provide proof for your reason. Some reasons they may accept are divorce, death in immediate family, natural disasters, and destruction of records that was beyond your control. Sometimes, incarceration or a long period of unemployment can get those penalties abated or removed also.
If you know that you are going to have a problem filing your tax return on time or even paying your taxes, there are solutions. The IRS does provide ways to avoid and decrease penalties. As long as you stay honest, keep your records accurate, and file and pay on time, you should be able to avoid IRS penalties.
Get complete details on how you can proactively address IRS Penalties easily! When you need IRS Help, you can find all the answers that will meet your requirements today!
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