Income Tax Penalties
Do You File And Pay Your Income Tax In Time?
Do you file and pay your income tax in time? If yes, then you are exempted from the chores of income tax penalties. For those, who do not pay their taxes in time or fail to file their return due to one or the other reasons should be ready to face income tax penalties. As per US tax law, every individual who is earning an income is liable to pay his or her share of income tax. Failure to do so results in income tax penalties.
You may have to face income tax penalties that might range from monetary fine to criminal prosecution depending upon your case. Reasons for non-payment or underpayment of your income tax would decide your severity of case. However, if you are able to explain your excuses with documentary evidence and has a valid reason for the same then you may be exempted from any of the income tax penalties.
You may opt for the services of an income tax professional that could assist you in filing your income tax. An income tax professional could also refer you many ways by which you can reduce your income tax and save on the penalties that have been imposed upon you. These income tax professionals keep themselves updated with the changing laws and clauses in the taxation law that can benefit you in the end.
Income tax penalty for not filing your income tax amounts to 5% of the tax amount for each month you have delayed the payment. If you provide frivolous return statement or incorrect tax then you would be charged with a penalty of $500 along with other related penalties. An additional penalty of 20% is charged if you underpay the tax amount due to negligence or taxation rules and regulations. Income tax law includes many such types of income tax penalties for defaulters.
The best way to avoid such income tax penalties is to understand the income tax law. You must learn the ways to file and pay your taxes. If you consider yourself novice then you can take help of your friend or family who is an expert in this field. Otherwise, it is advisable to take professional help so that you do not have to face income tax penalties.