Tax penalties can be both stressful and expensive, so it’s understandable that you want to do everything possible to avoid them. Follow these easy tips to avoid three of the common kinds of tax penalties!
File on Time
If you do not file your tax return on time, you’ll end up owing a failure-to-file penalty (5% of the unpaid taxes per month). Make sure you file for an extension if you are not going to be able to submit your tax return on time. However, remember that you will still owe a failure-to-pay penalty on any tax you owe, even with the filing extension, so it’s best to file and pay on time whenever possible.
Double-Check Taxpayer IDs
If you omit or submit an incorrect taxpayer ID number as part of your tax return, you could face a penalty related to those missing TINs. That’s why you should always double-check all taxpayer ID numbers, including those of dependents, before filing your return. The amount of this fine varies depending on how much time passes before the error is corrected, so if you accidentally submit an inaccurate TIN on a tax form, make sure you correct it as soon as possible.
Check Your Balance
Before writing a check to pay your tax balance, make sure you have sufficient funds to cover the check! If your account has insufficient funds, you’ll end up paying a fee of up to 2% of the tax owed.
Have questions about dealing with tax penalties? Just ask the experienced experts at Taxation Solutions, Inc. We’ll put our 40+ years’ experience to work for you!