With only a month to go until your annual taxes are due, you may be feeling stressed out and overwhelmed. But if you’re tempted to let that deadline slip past, think again. The tax authorities impose a variety of tax fines and penalties to encourage payment, and the last thing you want is to get caught in a vicious cycle that adds to your overall tax debt.
Two common tax penalties you should be aware of include:
- Penalty for late filing: Generally 5% of the unpaid taxes for each month or part of a month that a tax return is late, up to 25% of your unpaid taxes
- Penalty for late payment: Usually 0.5% per month of your unpaid taxes, building up to as much as 25% of your unpaid taxes
Because the failure-to-file tax penalty is greater than the failure-to-pay penalty, it’s important to file your tax return paperwork even if you can’t currently pay what you owe. The long-term fallout will be worse if you stop filing altogether.
If you’re in a back tax situation with tax penalties applied to your account, get in touch with Taxation Solutions, Inc. today. We’re Detroit’s source for IRS penalty abatement services, as well as for help filing back taxes and negotiating tax settlements. Contact us at (248) 919-8964 to get started!