Who’s Preparing Your Taxes?
Tax law is complex and it changes constantly. It is therefore important to choose a tax preparer with experience in preparing tax returns for individuals and/or businesses similar to yours, and one who can assist you with the services you need.
Enrolled agents, tax attorneys and certified public accountants have training, skills and expertise in both federal and state taxes. Employing Eagles Tax & Accounting Services makes filing individual and business taxes easier and more manageable.
- Filing & Paying Taxes Due on Time: Taxpayers should always file their tax returns on time, regardless of whether or not taxes due have been paid in full, in order to avoid failure to file penalty. The failure to file penalty increases the amount of taxes unpaid. This makes it more difficult for the taxpayer to pay the taxes owed in a timely manner.
However, the status of limitation period does not exist if no return is filed. Therefore, the government can and will assess the tax or initiate a court proceeding to collect the amount of tax owed at any time. It is constructive to file returns on time when required.
- Failure to File & Failure to Pay: The IRS will charge interest on taxes not paid by the original due date. Taxpayers who do not file a return by the due date are liable to a 5% monthly penalty on the net tax owed. The maximum penalty for failing to file a return is 25%. If failure to file your tax return is due to fraud, the penalty rate is 15% monthly, up to 75% of the portion of understatement attributed to fraud.
- Payment Requirements: Individuals and Corporations are generally required to pay quarterly estimated income taxes. The amount of each payment should be the same if income accrues uniformly throughout the year. To avoid an estimated income tax penalty, seek the advice of a tax practitioner.
- IRS: May impose a 20% accuracy-related penalty to any underpayment relating to negligence, any substantial understatement of income tax, or other errors.
- Protect and Safeguard Assets & Records: Since taxpayers are responsible for items on their tax returns, it is important to have proper records of transactions to substantiate your deductions and claims. Taxpayers should safeguard assets and maintain accurate financial records.
Taxpayers should keep all documents (including cancelled checks, receipts, and other data) that support their statements of income and deductions. These documents are necessary to prove accuracy and completeness of the tax returns to the taxing authorities. Because the final responsibility of the tax returns rests on taxpayers, it is important to review them carefully with your tax preparer before signing it.
- Prevent Identity Theft: Be aware of identity theft. Protect your information, especially your social security number, and be cautious when choosing a tax preparer. Avoid tax preparers who claim that they can obtain larger refunds for you, get you more money than other tax preparers, or base fees on percentage of the tax refund amount.