Tax Penalties and Interest

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Tax penalties are incurred for late filing, late payment, or incorrect filing of tax forms. The revenue authorities have the authority to level fines to encourage compliance with the system of voluntary reporting. Often, if the problems are accidental and not systemic, these fines can be waived, but it is at the discretion of the government official. The ability to waive the tax penalties is one of the negotiating tools available to government officials trying to collect taxes due.

Tax penalties and interest, are the bane of the tax preparer, and the most painful thing to tax filers. These related things are when the government charges you interest for being underpaid, or a penalty rate for non-compliance. The penalties can sometimes be lifted as part of a compliance process, but interest is usually fixed. Ironically, the government is often able to avoid paying you interest, but demands it pretty quickly.

For a failure to file an extension on time, your tax penalties will start from the momember of the original due date. If you file your extension, you will generally avoid tax penalties if you file by the extended date. Depending on the government agency, the penalties and interest may date back to the original filing date or the extended date.

The best way to limit your tax penalties and interest is to keep good solid records and file your tax forms on a timely basis. We encourage our tax clients to choose the appropriate one of our monthly packages, to allow us to focus on IRS compliance and they focus on their business.

How the Health Care Law Affects Your 2014 Taxes

By |2021-03-25T14:52:31-04:00February 24th, 2015|Categories: Deeper and Longer with Bette|Tags: , |

The Affordable Care Act has some provisions that affect your 2014 tax return. For many, it means simply checking a box on their return to report health care coverage for themselves and their dependents for 2014. Some might report being eligible for an exemption. Others will need to calculate a shared responsibility payment.

Why Not to Pull Money Out of Retirement Accounts Early

By |2021-03-24T14:23:38-04:00September 9th, 2014|Categories: Quickies with Bette|Tags: , , , |

Hopefully, you have been doing the responsible thing and putting away a nice little nest egg in retirement plans such as pensions, profit-sharing plans, and individual retirement accounts (IRAs).

When Outsourced Payroll Goes Bad

By |2021-03-24T13:29:09-04:00September 2nd, 2014|Categories: Deeper and Longer with Bette|Tags: , , , , |

Usually, when you work with a payroll company, the last thing you expect is for them to not send your tax payments to the IRS. Unfortunately, in a recent court case, when a payroll company declared bankruptcy, that is exactly what happened.

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