Asian Journal- The Filipino-American Community Newspaper

FOR quite a few taxpayers who have deferred on filing their 2008 income tax returns, the deadline is just by the corner. The most prudent action would be to file your income tax return before the October 15th deadline to avoid additional penalties and interest owed.

Remember, your tax payments would have been due on April 15th, whether or not your tax forms have been completed or not. If you filed an extension, ensure that you remain compliant with the extension deadline. Yes, interests will be assessed but they’ll be much less than if you would have to pay on additional penalties and interests should you file beyond the extension date allowable.

The IRS imposes a minimum filing penalty of .5%, and a maximum of 25 %, of the unpaid taxes not paid on the due date for each month your taxes are not paid. Sending even a minimum payment will help ease the exorbitant penalties and interests.

With this in mind, you can easily accumulate hundreds and thousands of dollars in unnecessary fees and penalties. I have witnessed a client paying approximately $4,000 in penalties and interests on a 1099 income originally valued at about $900 (that’s income, not tax due) 3 years prior to IRS discovering the unreported income.

However, paying 90% of your total obligation would allow you to have your penalty waived by the IRS but that doesn’t absolve you from paying the interest.

Remember that this is also your last chance to claim the economic stimulus recovery credit, if you haven’t received enough of your stimulus payment from the Bush administration in mid-2008.

Let’s face it: the reality is that nobody likes paying taxes. We all despise taxes to a certain extent, but no one is exempt from messing with the IRS on taxes. But don’t get me wrong, the IRS is not the agency classic for punishing its taxpayers, as we all have preordained to believe. You could actually negotiate given the hard economic times we are experiencing.

If you can’t pay your taxes on time, you have options in paying your dues. As rigid as it seems, these are better alternative solutions than ignoring the deadline at all.

Comments

Add New Search RSS

Write comment

Name: Email:  do not notifynotify Title: UBBCode:         -color-aquablackbluefuchsiagraygreenlimemaroonnavyolivepurpleredsilvertealwhiteyellow -size-tinysmallmediumlargehuge     Please input the anti-spam code that you can read in the image.

Powered by AJPress

3.26 Copyright (C) 2008 Compojoom.com / Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."