IRS or State Tax problems can have a demoralizing effect on an individual, family and or, business that may seem unsolvable. Are you fighting to settle, reduce tax debt but have no results to show for your efforts? Perhaps a No Non Sense DWK Tax Group Tax Attorney is the remedy you been searching for.
DWK Tax Group's staff is rational and reasonable individuals looking for comprehensive options and solutions that best fit the troubled Taxpayer, most importantly, satisfying the aggressive federal and or, state taxing authority.
Have you ever wondered why tax bills grow so quickly? Have you ever considered the ramifications of incorrect W-4 exemption claims or neglected self employed income quarterly estimated tax payments? Today, we will focus on what additional charges that are tacked on to existing tax amounts owed, specifically with the IRS.
As commonly known, tax returns and taxes owed are due on April 15th each and every year or receive a refund if proper withholding mechanisms are in place. Tax returns are examined by the IRS for mathematical errors, accepted and posted. If a discrepancy is discovered a bill will be sent. For the lesson's sake we are going to use an example of $1000.00 owed after an elapsed time of 1 year.
Make sure you are sitting, the news is staggering.
Generally, interest is charged on any unpaid tax from the due date of the return until the date of full payment. The interest rate is determined quarterly and is the federal short-term rate (3%) plus 3 percent. Interest is compounded daily.
If you file a return but don't pay all amounts shown as due on time, you'll generally have to pay a late payment penalty of one-half of one percent (0.005) of the tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full or the 25% maximum penalty is reached. The one-half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy.
If you owe tax and don't file on time, the total late-filing penalty is usually five percent of the tax owed for each month, or part of a month that your return is late, up to five months. If your return is over 60 days late, the MINIMUM penalty for late filing is the smaller of $135 or 100 percent of the tax owed. YIKES!
Cumulative balance after 1 year (4/15/2013):
Balance due: $1000.00 Balance due (4/15/2012)
Interest: $61.83 ((0.06 / 365 = 0.00016438356 + 1= 1.00016438356 ^365 = 1.06183131 X 1000 = (6% compounded daily))
Penalty for a late payment: $3.60 (.005 X 12= $3.60)
Penalty for failure to file on time: $135.00 (After 60 days $135 or 100% penalty)
Total Balance due in 1 Year: $1200.43
In all actuality our world consists of balances ranging in the $10,000+ range. Do the math...WOW! Are you kidding me?
DWK Tax Group advises, YOU must file your return and pay your tax by the due date to avoid interest and penalty charges.
Information provided by Topic 653 - IRS Notices and Bills, Penalties and Interest Charges
If seeking a settlement with a harassing taxing authority, Call 1 - 8 6 6 - 2 2 6 - 6 1 0 2 for nationwide representation of a menacing, anxiety producing, sleep depriving issue with back taxes owed. Give us a shout, 20 minutes of your time is all we need. Our Tax Analysis is detailed and straight to the point.
Thank you for your time in advance...