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TOP FOUR TECHNIQUES BY WHICH A TAX PENALTY CALCULATOR HELP YOU

It is always best to expect the ‘unexpected’ when filing tax returns. However, even if you have the most benign intentions, things may not go as planned, and you might face tax penalties for underestimating the quarterly payments, missing a deadline, bouncing off a check to the IRS, and much more. Therefore, with the upcoming tax season approaching, it is best to equip oneself with all the nitty-gritty of tax penalties and understand how tools like a tax penalty calculator can help.


WHAT ARE THE COMMON TAX PENALTIES? 


Some of the common penalties that the IRS charges are –


  • Failure to File – It is applicable when you do not file your taxes on time. Here, the tax penalty is 5 percent of the unpaid tax for each month or part of a month wherein your return is late. However, the fine caps at 25 percent of your balance.

 

  • Information Return – Expect penalties if you do not accurately furnish the necessary information return or payee statement within the stipulated timeframe.

 

  • Failure to Deposit – It entails penalties when you do not pay employment taxes correctly or on time.

 

  • Accuracy-related Penalties – The IRS levies fines when someone does not declare all their income or claims deductions or credits for which they are not eligible.

 

  • Failure to Pay – It applies when you do not pay your tax return by the given date. Here, the tax penalty is 0.5 percent of the taxes you owe each month, and it caps at 25 percent of the total tax due.

 

  • Underpayment of Estimated Tax by Individuals – It is applicable when an American citizen does not pay their taxes on time.


WHAT IS THE METHOD TO WAIVE OFF PENALTIES 


You would never have to deal with IRS penalties in a utopian world. Unfortunately, however, they are a reality for many people. The good thing is that the IRS is often willing to work with people who make mistakes; the process is known as penalty abatement.


  • Reasonable Cause – The IRS might agree to waive tax penalties if you did not file or pay your taxes on time due to grueling circumstances like natural disasters, house fires, the death of a family member, etc.

 

  • First-time Penalty Abatement – If you are always on top of your tax-paying game and made a mistake once, then the IRS might waive off your penalties once.


A PENALTY TAX CALCULATOR – THE LIFESAVER THAT EVERY TAXPAYER NEEDS


An AI-driven tax penalty calculator like that of Flyfin can help you figure out your tax penalty amount.

  1. A tax penalty calculator assists you in determining the fines you owe to the state.


  1. The process is quick, easy, and requires basic information from your side.


  1. You can stay on the good books of the IRS as a tax penalty computes the various penalties of the IRS and helps you repay them on time.


  1. An AI-driven tax penalty calculator means that the chances of mistakes in estimations of penalty are close to none.


Thus, top-notch tax penalty calculators will calculate how many penalties you owe to the state and make your life a little less stressful.


You can also Read IRS Tax Forms, Where to get Them, and Publication

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