Tax penalties are the last thing taxpayers want. However, sometimes it is not possible to pay them or there are special situations or circumstances that may prevent you from paying. Other people may not want to pay taxes to the Internal Revenue Service or IRS willingly. Whatever the reason might be, there are some penalties citizens should avoid.
Saving money on a daily bases can prevent you from not having enough dollars for tax payments. In this way, you can dodge the negative consequences. Organization and planning are essential too. Not only is important to save money, but also to set an alarm so as not to forget the deadlines. For instance, this year’s tax season started on January 23. But it will be over by April 18.
Which are the penalties for not paying the tax you owe to the IRS?
Those taxpayers that do not pay any taxes to the Internal Revenue Service before the deadline will have to face a fine. This penalty or fine will only be 0.5% of what you owe per month. Surprisingly, the percentage to pay a penalty is not that big. But, depending on the amount you owe it could be a lump sum. Bear in mind that is not about the amount you will have to pay but about investing or saving that money instead.
Not many people think about the consequences of not filing your return. This could be much worse than not paying the tax you owe the Internal Revenue Service. Therefore, filing before the April 18 deadline must be a number one priority. Asking for help or hiring a tax professional is something you could also do. Tax preparers can make the most of your tax refund and allow you to forget about this burden.
What is the penalty for not filing?
Despite the fact that many people are scared of the negative effects of not paying any tax, some ignore how expensive it could be not filing. There are lots of messages on social media and on commercials about tax return deadlines. Still, many people fail to remember to do it on time. You should take into account that this could be really costly.
The penalty for not filing your return before the deadline is over is a 5% payment of all the taxes you have not paid per month. This percentage corresponds to the taxes you didn’t pay on time. The IRS will be in charge of sending you a notice if you have to pay a Failure to File Penalty. The maximum penalty will not exceed 25% of the unpaid taxes you owe. Having both penalties in the same month means a 5% combined payment. File and pay now to get rid of this trouble.