A number of people are forever finding themselves in the unfortunate predicament of having to pay taxes when they are not earning enough money to do so.
For others it is simply because they are stubborn and do not appreciate the need to pay taxes.
Regardless of which disaster bound ship you are sailing on, it is very important to know about the possible consequences of not paying income tax when it is due.
The internal Revenue Service attaches a wide range of penalties against individuals responsible for either full tax evasion or delays in the payment of tax.
The penalties associated with not filing for income tax always seem like they can be overcome very easily, but believe me, they are not.
In fact the punishment that is leveled against you is far worse than the amount of money which is due.
Imagine the impact of imprisonment, fines, civil penalties; how can all of these penalties be any better than simply paying the amount of money due? The Failure-To-Pay penalty is perhaps the least severe of all possible forms of punishment.
When you miss the April 15th deadline without requesting for an extension of the deadline you will in most cases be expected to pay this fine.
Such a penalty is normally 5% of the total amount of money which was due and is supposed to be paid every month for a given period of time.
However, in other rare instances the percentage expected of you every month may be as high as 25% of the amount due; but this is mainly reserved for extreme cases of tax evasion.
In the latter instance you will end up paying more money than the income tax originally required of you, not so much of a smart idea right? Filing tax returns after a timeframe of 60 days leaves you responsible for paying a minimum of $135, or the due amount, whichever of the two is smaller.
A Tax lien is one penalty that can have adverse consequences on any pieces of property you may own.
When a tax lien is filed against you as a sentence the IRS automatically obtains the right to claim your property as a form of security on the debt.
Therefore any assets will be withheld against your personal interests for an undefined period, until of course you pay the existing tax debt.
This is normally the case when you evaded taxes, received a notice to pay and still did not make any payments 10 days after receiving notice to pay.
However, this is not a standard penalty for the aforementioned breach of IRS tax debt regulations.
The Substitute Return penalty is very much different from the rest of the other penalties mentioned here.
When a substitute tax return is filed against you the tax exemptions you were generally expected to get for filing for tax on time are immediately withdrawn, until further notice.
Under normal circumstances these exemptions were meant to reduce the amount of money due and make life a little easier for you; see how even the IRS has a good heart? So at the end of the day you will end up paying more money every year than usually expected of you.
The best way out of your possible financial predicament is to file for income tax anyway, regardless of whether you have enough money or not.
The benefit of doing this is that certain adjustments can be made to your filing system, thereby making it flexible and lenient.
For others it is simply because they are stubborn and do not appreciate the need to pay taxes.
Regardless of which disaster bound ship you are sailing on, it is very important to know about the possible consequences of not paying income tax when it is due.
The internal Revenue Service attaches a wide range of penalties against individuals responsible for either full tax evasion or delays in the payment of tax.
The penalties associated with not filing for income tax always seem like they can be overcome very easily, but believe me, they are not.
In fact the punishment that is leveled against you is far worse than the amount of money which is due.
Imagine the impact of imprisonment, fines, civil penalties; how can all of these penalties be any better than simply paying the amount of money due? The Failure-To-Pay penalty is perhaps the least severe of all possible forms of punishment.
When you miss the April 15th deadline without requesting for an extension of the deadline you will in most cases be expected to pay this fine.
Such a penalty is normally 5% of the total amount of money which was due and is supposed to be paid every month for a given period of time.
However, in other rare instances the percentage expected of you every month may be as high as 25% of the amount due; but this is mainly reserved for extreme cases of tax evasion.
In the latter instance you will end up paying more money than the income tax originally required of you, not so much of a smart idea right? Filing tax returns after a timeframe of 60 days leaves you responsible for paying a minimum of $135, or the due amount, whichever of the two is smaller.
A Tax lien is one penalty that can have adverse consequences on any pieces of property you may own.
When a tax lien is filed against you as a sentence the IRS automatically obtains the right to claim your property as a form of security on the debt.
Therefore any assets will be withheld against your personal interests for an undefined period, until of course you pay the existing tax debt.
This is normally the case when you evaded taxes, received a notice to pay and still did not make any payments 10 days after receiving notice to pay.
However, this is not a standard penalty for the aforementioned breach of IRS tax debt regulations.
The Substitute Return penalty is very much different from the rest of the other penalties mentioned here.
When a substitute tax return is filed against you the tax exemptions you were generally expected to get for filing for tax on time are immediately withdrawn, until further notice.
Under normal circumstances these exemptions were meant to reduce the amount of money due and make life a little easier for you; see how even the IRS has a good heart? So at the end of the day you will end up paying more money every year than usually expected of you.
The best way out of your possible financial predicament is to file for income tax anyway, regardless of whether you have enough money or not.
The benefit of doing this is that certain adjustments can be made to your filing system, thereby making it flexible and lenient.
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