You have not filed your taxes at the right time, and this is the reason for your rising stress levels. This stress is quite common for small business owners. However, if you have the right professional by your side, you don’t have to worry about such things. As suggested by a CPA firm in Centennial, CO, it is wise to keep the most common IRS penalties in mind. Also, we have come up with the most useful tips to avoid these penalties. Have a look at the points mentioned below to clear the air.
The most common penalties imposed by the IRS
- Information return penalties
- Accuracy related penalties
- Failure to pay penalties
- Failure to file penalties
- Underpayment of estimated tax
- Failure to deposit penalties
Tips to avoid penalties
- Firstly, if you wish to avoid information-related penalties, you must make sure that all the statements and returns are filled with the right information. Also, don’t forget to fill them within the deadline.
- Secondly, when it comes to accuracy-related penalties, you need to avoid them by following the proper rules and regulations during the filing process. If you need to give much of your time and effort, you can get in touch with a tax professional to help you out.
- Thirdly, you will have to face failure to pay penalties or failure to file penalties if you fail to submit or file your taxes within the deadline. You may need more time to pay or file your taxes, and in such a case, you can file for an extension. An extension will reduce the amount of the penalties you owe the IRS.
- Fourth, you can face a penalty if you underpay your taxes. This can be avoided by making a proper calculation of taxes ahead of time. This will give you enough time to keep aside money for the tax season. If you fail to make a proper calculation, you can take the help of a tax professional like a CPA.
- Fifth, if you have not deposited employment taxes on time, you can be charged with failure to deposit penalties. To avoid falling prey to this penalty, you must be aware of the due dates, forms, tax schedules, etc.
Now that you know how to avoid the most common IRS penalties, it is important to keep in mind that the best thing you can do is get in touch with a CPA. They will make sure that you don’t fall prey to any such situation.