Things to Know About Tax Penalties and Interest

One of the worst ways the IRS can hurt you is if you do not file your taxes on time, or miss other deadlines. Not paying attention to the deadlines, details, can make the amount of taxes you owe much more than they were initially with fees, and interest payments. Not only will missing deadlines cost you money, but it will also cost you extra time. Nobody is perfect however, and it can be easy to miss a payment if your life is hectic. What can you expect to pay in tax penalties and interest  if you do miss payments however? Here are some things you can do to not only avoid IRS payments, but solve some problems if you end up with tax penalties.

First thing you can do is request more time. People are entitled to a six-month extension in the event that  you have not filed your taxes in time. This is an easy way to avoid costly tax penalties. You can request an extension using one of two methods. The first is electronically on the IRS website. Using this method is much faster than the alternative, which is sending a Form 4868 through the mail. You can use these methods regardless of your income level.

The second, inevitable option is by paying what you owe. Nothing in life is guaranteed but death and taxes so you knew this was coming. Luckily it is easier than ever to file taxes. You can do them electronically which saves a lot more time and also is less cluttered than filing them with paper. Paying your taxes on time is the best way to avoid tax penalties.

A great way to avoid tax penalties is by watching the clock. Although you can file an extension, payments are still due by the April 18th deadline. A great way to remember to do this is by setting a reminder in your phone or email to tell you to file your taxes, or go to your tax expert a month in advance. Technology has made everything easier, including staying on top of things to avoid penalties for missing deadlines.

If you do find yourself owing money to the IRS, pay as much as you can as often as you can. Late payments are subject to a 4% interest rate yearly, compounded daily. This can end up being a lot of extra money so it is important to meet the deadlines, and pay it off as soon as possible,

Best Tax Experts can help with any tax problems you find yourself in, as well as provide solutions if you find yourself buried in tax penalties.