Avoid Tax Penalties

Avoid Tax Penalties

Consider your options
File on time
Get an extension
Enter an installment agreement

Almost everyone hates taxes, but you might face serious consequences if you fail to file or fail to pay. Even if you have difficulties, you can take some steps to minimize penalties and other fees. Knowing your choices can help you decide what you should do. For more information contact us at 212-876-2341

Avoid unnecessary penalties by considering your options. Some people fear not being able to pay and choose to do nothing. "If you file on time and not pay, you can at least save on filing penalties.

We recommend if you can make payments within 30 to 60 days from the due date. It takes approximately six weeks before penalties can be assessed and you get your first late notice.

Get an extension—if needed—to avoid failure to file penalties. Extensions will allow you to wait between three and six months, depending on your form of business and your circumstances. "It’s the smart thing to do and it only takes one piece of paper. Keep in mind, however, that you may owe interest and late payment fees if you do not pay on time.

A sole proprietor should file a personal income tax extension (Form 4868) and has until April 15 to do so. On the other hand, the filing date for corporations (Form 7004) is on March 15^.

Also check with your our accountants regarding the requirements for your state. If you file for an extension on the federal level, the state may not require you to fill out a separate form.

Enter an installment agreement if you cannot pay. The IRS will consider you for such an arrangement after you submit Form 9465. Upon approval, you will be charged a $43 setup fee. "You can suggest the amount, and [the IRS] can agree to it.

The IRS cannot take any collections action after you apply to enter an installment agreement, while you are fulfilling the obligation and up to 30 days after your arrangement has expired.

However, you will be paying interest and penalties on any unpaid balance. The IRS may also file a Notice of Federal Tax Lien—a legal claim on your property—until you make the final payment.

So if you need an agreement please contact us at:

Sostre Tax Services at once, our number is (212) 876-2341