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When a taxpayer makes a mistake on their return, there are penalties they could face in the event the IRS catches these errors. The IRS has a team that investigates all the returns filed each year who will look for suspicious or unusual activity that catches their attention. While there are many types of mistakes that will in fact incur you a penalty from the IRS, below are a few that TurboTax has identified.
- Late filing penalties
The IRS sets a deadline every year for taxpayers to get all their required documentation filed or at least request an extension. In most cases, it is April 18th, however, that date can fluctuate if it falls on a holiday. Getting your taxes filed can be daunting and overwhelming but the fact is, the IRS knows you have earned some income as they receive copies of your W-2’s and your 1099’s. So, the chances of them catching that you didn’t file are higher if you receive one or more of these forms.
Did you know that the IRS could impose a 25% late filing penalty to your tax bill all because it is late? And if you fail to sign your return, the IRS will not accept it which technically means you didn’t file. That too could place you in the “late filer” pile and cause you to become penalized as well.
Have you been contacted by the IRS and informed you are being audited? If so, is it vital you contact us at USAttorneys.com and allow us to pair you up with a tax attorney in West Virginia that can aid with your matter. Being audited by the IRS could mean you are looking to pay back thousands of dollars in which you might not have right now. And because the IRS follows deadlines, if you don’t respond or take action, you could be looking at much harsher penalties than the ones you would initially be subjected to.
- Reporting different mileage rates
For those who are self-employed, filing a deduction for the miles put on your vehicle is very common. But, because many individuals take advantage and attempt to claim more than they should, the IRS looks closely at this deduction to ensure things match up. It is very important that you keep accurate records when it comes to mileage and that you have all your receipts or proof that show you paid for the gas used to drive. If the IRS audits you and questions this deduction, you will need to turnover your proof of all the mileage you are claiming as well as receipts as mentioned.
If you are unable to provide what it is the IRS deems as valid evidence, they may charge you a 25% inaccuracy penalty, additional tax, and interest on the entire amount you owe.
- Penalties for math errors
If you make a mathematical mistake that has allowed you to pay less tax than you should, the IRS will likely come looking for the remaining amount you owe, plus more.
To learn more about the other types of mistakes you want to avoid, you can visit TurboTax by clicking here.
And in the event you are dealing with any sort of issue involving the IRS no matter how complex it may be, we want to assist you in finding the most suitable tax lawyer in West Virginia who is capable of taking on your case.