Paying taxes is a good thing to do as a civic duty, but also an important thing for everyone. Failure to do so can expose you to significant liabilities. Every time you flaunt any tax regulations, you are at risk of receiving a hefty tax penalty. When it comes to avoiding the penalty, the first thing you need to know is the type of penalty, so that you can find ways to prevent it.
Below is a list of penalties and how to avoid them.
Being Late To File Returns
It is a common problem for most people. Sometimes you may do it negligently, or you probably forgot. Or sometimes, you might be afraid of filing the wrong amount, so you end up not filling. The solution to this is to keep a tax schedule. Monthly and quarterly taxes are the best for people who want to file their taxes on time. Even if you forget, you will only forget filing for one month or one quarter. At the end of the year, it will be easy to harmonize the monthly or quarterly filings.
Failure To File Taxes
While being late attracts a penalty, failure to file is a serious violation that can even lead to a jail term. Tax evasion will require attention because it can easily escalate. The solution to this problem is to ensure that you file your taxes at all times before the deadline. If you don’t know about taxes, you will need a CPA to help you out. If you have a reason not to file, it will be prudent to let the IRS or your state know.
You could have a valid reason for not filing taxes such as natural disasters and other disasters such as accidents or even other special considerations. A tax attorney can help you out if you think you don’t need to file taxes or if you need to protect yourself against possible penalties. A competent lawyer will be aware of what steps you should take in order to justify your actions. They can make the process a lot smoother compared to having yourself talk numbers to no end with the IRS.
Tax Fraud
As you can see, this is not an ordinary tax problem. It points to a matter of criminal nature. Tax fraud includes understatement of income to complex income cover-ups. Fraud in the tax filings and reports amount to tax evasion and attract more than penalties. The only way to avoid this is to hire a professional firm so that they can do your taxes. You want professional tax auditors and experts who will ensure that you only pay what you must and not anymore. They can help you save a lot in the process if they know their job. If you are suspected of possible tax fraud, you will need to get an attorney who is familiar with tax law.
One way of avoiding tax penalties is by ensuring that you file the right amount on time. Ensure that the check is good, and do not engage in fraudulent schemes on taxes. If you find yourself on the defence side, ensure you have the right lawyer to aid and fight on your behalf.