No one likes to think about being penalized by the IRS, but, unfortunately, if you’re not careful, this can happen to you very easily. All it takes is a simple mistake on your part, and you can end up paying more money to the IRS than you would have had to otherwise.
Fortunately, though, there is a way to avoid all types of penalties, and that way is to be careful to follow all rules and guidelines set forth by the IRS, to adhere to any and all deadlines the IRS gives, and, above all else, if you know that you are unlikely to be able to meet all of the IRS’ strict requirements, making the smart choice to hire a tax professional to assist you.
If you don’t hire a professional and you aren’t capable of doing all of your taxes on your own, then you could find yourself facing one of these serious penalties.
Late Filing Penalties
One of the most common penalties that people have to pay, come tax time, is the late filing penalty, which applies if you do not file your taxes on or by April 18th.
If, for some reason, you know that you are not going to be able to have everything filed by that date, then you need to at least file for a tax extension by that date. Not filing your taxes or filing for an extension by the appropriate date can lead to a sizable late filing penalty that can add as much as 25% to your tax bill.
Avoid this hefty penalty by knowing and remembering the filing date mentioned above and getting your return done on time.
Penalties for Math Mistakes
Obviously, not everyone is a “math whiz” or good with numbers. Unfortunately, though, if you’re not someone who’s a math expert, then you could easily find yourself making errors on your tax returns, especially if you fill them out the old-fashioned way, i.e. by hand.
You’re much better off filing your taxes online or via an automated program that will do the math for you, or, better yet, relying on a professional. But, in any case, you need to, plain and simple, find a way to avoid mathematical errors.
If you don’t, you could find yourself paying interest on taxes that, thanks to your faulty math, you didn’t initially pay.
As you can see, it’s very easy to make a tax mistake that could lead to a penalty- these are just two of many examples. Avoid these problems and penalties by relying on a professional for help; that’s really your best bet!
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