• Terms and Conditions
  • Privacy Policy
  • Contact Us
Thursday, June 1, 2023
  • Login
New Trendings
  • Home
  • Business
  • Finance
  • Entertainment
  • Crypto
  • Digital Marketing
  • Education
  • Gaming
  • Technology
  • Contact Us
No Result
View All Result
  • Home
  • Business
  • Finance
  • Entertainment
  • Crypto
  • Digital Marketing
  • Education
  • Gaming
  • Technology
  • Contact Us
No Result
View All Result
New Trendings
No Result
View All Result
Home Finance

The Most Common Types of IRS Tax Penalties

New Trendings by New Trendings
September 12, 2022
in Finance
0
The Most Common Types of IRS Tax Penalties
74
SHARES
1.2k
VIEWS
Share on FacebookShare on Twitter

In 2021, the U.S. government collected more than $4 trillion in revenue from individual, corporate, and social insurance taxes. So if you filed (and paid) your taxes, congratulations, you contributed to the government’s revenue!

However, if you didn’t pay your 2021 taxes, you’ll likely have some tax penalties to pay on top of what you already owe. But many of these fines are easy to avoid.

Just keep reading to learn about the three most common types of tax penalties, so you never have to face them.

You might also like

A guide to London's High Growth Segment (HGS)

A guide to London’s High Growth Segment (HGS)

January 24, 2023
10 Tips on Easy Investing for Beginners

10 Tips on Easy Investing for Beginners

October 31, 2022

1. Failure to File

Tax Day is usually April 15th (when the date falls Monday thru Thursday), so you want to plan to file your taxes by this date yearly. If you know you won’t be able to file by this date, you should file for an extension. The extension gives you until October to file and pay.

If you don’t file or request an extension by Tax Day, the IRS will charge a failure to file a penalty. The fine is 5% of your unpaid tax bill for each month your return is late but has a cap of 25% or five months of your total bill.

If you file your return more than 60 days late, there will be a minimum penalty. The minimum penalty is the lesser amount between $435 and 100% of your tax bill.

If you cannot pay your tax bill, you should still file on time to avoid this penalty. For those that expect a refund, not filing could mean you eventually lose your reimbursement.

2. Failure to Pay

Even if you file your tax return on time, you can still receive tax penalties after filing if you don’t actually pay your tax bill. The deadline for payment is also Tax Day.

Not paying your tax bill results in a 0.5% penalty on the tax you owe per month. It also caps at 25% of your tax due.

If you fail to file and pay, the IRS will decrease the failure to file a penalty by the amount of the failure to pay a fine. This way, your maximum liability for your IRS tax penalties is not more than 5% per month.

If you cannot afford your tax bill, pay as much as you can by Tax Day and continue to pay it off as fast as possible. If you can’t pay it off within a few months, requesting an installment agreement from the IRS is best.

3. Underpayment

Per the IRS, you’re supposed to pay taxes throughout the year instead of a lump sum payment on Tax Day.

If you’re a W-2 employee, your employer can withhold taxes for you. Yet, if you’re self-employed, you must make quarterly payments to the IRS based on your estimated income.

If you owe more than $1,000 on Tax Day, you could face a penalty. However, if you receive an IRS penalty for underpaying your tax bill, don’t rush to pay it immediately.

First, contact a tax professional and learn more about IRS penalty interest abatement. Not all IRS penalties are set in stone, and it’s possible to reduce or eliminate the fine. A tax professional will help you navigate the process of understanding and, if applicable, paying your penalty.

Don’t Let These Tax Penalties Happen to You

You can avoid these three most common tax penalties by filing and paying your taxes promptly each year. If you already have difficulty paying your tax bill, you don’t want to be responsible for additional fines.

Did you find this article helpful? Then, head over to the Finance section for more useful information.

Share30Tweet19
New Trendings

New Trendings

Recommended For You

A guide to London's High Growth Segment (HGS)
Finance

A guide to London’s High Growth Segment (HGS)

January 24, 2023
10 Tips on Easy Investing for Beginners
Finance

10 Tips on Easy Investing for Beginners

October 31, 2022
Scholarships In Singapore: Why Do Students Need It?
Finance

Scholarships In Singapore: Why Do Students Need It?

October 24, 2022
Next Post
How a Fire Tank Provides Security, Safety, and Peace of Mind

How a Fire Tank Provides Security, Safety, and Peace of Mind

Leave a Reply Cancel reply

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

10 Tips for Choosing the Right Builder for Your New Home Construction

10 Tips for Choosing the Right Builder for Your New Home Construction

by New Trendings
May 3, 2023
0

Choosing the right builder for your new home construction is a critical decision that will impact the entire project. It...

5 Best Shows Like Narcos and Narcos: Mexico

5 Best Shows Like Narcos and Narcos: Mexico

by New Trendings
April 29, 2023
0

Shows like Narcos and its spinoff Narcos: Mexico is no doubt two of the best drug lord shows of this...

How Businesses Use Quantitative and Qualitative Data

How Businesses Use Quantitative and Qualitative Data

by New Trendings
March 28, 2023
0

In today’s marketplace, businesses with access to the most high-quality data and the tools for interpreting it are the most...

New Trendings

New Trendings is a popular website that offers the latest news worldwide. We share knowledge by offering informative content on the latest topics such as technology, business, finance and many more to our valuable readers. We know how valuable time is so no crap, we provide the most accurate facts. Hope you enjoyed it, happy reading :) 

Recent Posts

10 Tips for Choosing the Right Builder for Your New Home Construction

10 Tips for Choosing the Right Builder for Your New Home Construction

by New Trendings
May 3, 2023
0

...

5 Best Shows Like Narcos and Narcos: Mexico

5 Best Shows Like Narcos and Narcos: Mexico

by New Trendings
April 29, 2023
0

...

How Businesses Use Quantitative and Qualitative Data

How Businesses Use Quantitative and Qualitative Data

by New Trendings
March 28, 2023
0

...

Most Rated

Unleashing the Potential of Health and Safety Software
Technology

Unleashing the Potential of Health and Safety Software

by New Trendings
March 22, 2023

New Trendings © 2022. All Rights Reserved. Designed by Creative SEO Lab.

No Result
View All Result
  • Home
  • Business
  • Finance
  • Entertainment
  • Crypto
  • Digital Marketing
  • Education
  • Gaming
  • Technology
  • Contact Us

New Trendings © 2022. All Rights Reserved. Designed by Creative SEO Lab.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In