Tax mistakes can happen, but it's important to know what you can do to ensure that your return is filed correctly and paid on time. Below, you'll find several common mistakes that laundromat owners make.
Note each mistake and make sure you learn from others so that you won't have to worry about penalties or possible jail time. When you're ready for new laundry equipment, forget the Dexter dealers NC companies and call T & L! We're the top Speed Queen and Continental dealers in NC.
Common Tax Mistakes Laundromat Owners Make
Late Filing
According to nolo.com, "If you're late in filing certain income tax returns or other forms, the IRS can penalize you an additional 5% per month on any balance due. But this penalty can be applied only for the first five months following the return's due date -- up to a 25% maximum charge."
Tax Fraud
Under reporting your income is considered fraud. Filing taxes with intent to commit fraud is punishable by law and comes with a 75% tax fraud penalty on the underpaid amount. Most of the time, those that have been charged with the penalty are aware of their fraud. However, there are simple mistakes that can happen. This is why it's good to work with a professional when it comes to filing taxes. That way, everything is filed honestly and accurately.
Underpayments
Everyone that files a tax return is responsible for paying at least 90% of the current year's tax bill. If it is not paid, there will be a penalty charge from the IRS. The IRS offers the option of installment payments in equal amounts that should be paid every three months. Even if most of the payments are made, the IRS could still charge a penalty if it's not paid at set times in equal, quarterly installments.
Those that choose to pay at least 100% will not be penalized. For individuals that make over $150,000 a year, 110% is taken in order to avoid penalty.
Late Penalty Payment
If you've been charged with a late payment penalty it's important to quickly begin paying your late penalty on time. Those that do not will see a .5% per month increase on the outstanding tax balance. Those who choose a payment plan option for the outstanding amount might be able to reduce their penalty increase to .25% per month.
Complete failure to pay a late payment might result in a 1% per month increase for those who have an intent to levy issued upon them. The maximum penalty for this can lead up to 25%.
Are you getting ready for 2017 tax return filings? If so, keep these mistakes in mind so that you don't create an issue for yourself or your business. Also take them with you into the new year so that you'll start off on the right foot with paying income tax for 2017!
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