Taxes Due

Finance • Taxes

FORM2290 Taxpayers who need to E-FILE using IRS TAXFORM 2290-FAQs

Jul 09, 2012 • By SenaDev • • 25 Views

Who is need to file Form 2290 and pay Heavy Highway Vehicle Use Tax?

Anyone who registers a heavy highway vehicle in their name with a gross weight of 55,000 pounds or more must file Form 2290 and pay the tax. Typically, owners of vans, pickup trucks, panel trucks and similar trucks are not required to file Form 2290 or pay tax on these smaller trucks. Trucks that are used for 5,000 miles or less (7,500 for farm trucks) are also excluded from this tax.

Who is need to e-file Form 2290?                     

IRS encourages all 2290 filers to e-file. If you are reporting 25 or more heavy highway vehicles for any taxable period, you are required to e-file Form 2290. You can e-file through www.TaxExcise.com an IRS-approved service provider. Electronic filing improves tax processing and saves you personal resources, including time and postage. In addition, e-file reduces preparation and processing errors. You can e-file your return from your own computer, any time of day or night. Use www.TaxExcise.com or www.Tax2290.com to e-file and your Schedule 1 is available almost immediately after IRS accepts it. No more waiting for it to come in the mail!

Why do I need an Employer Identification Number (EIN) to e-file?

IRS needs to have a system for protecting your privacy and making sure they know the identity of their filers. They use a combination of your EIN and your name as a unique identifier for each taxpayer. On an e-filed return, if a taxpayer's unique ID doesn't match their records, e-file rejects the return.

When are my Form 2290 taxes due?

The annual taxable period begins on July 1 of the current year and ends on June 30 of the following year. For vehicles that are in use at the beginning of the tax period, your2290 filing deadline is August 31. Taxes on the full tax period must be filed and paid in advance.

The due date for a partial period return depends on the month you first use your vehicle. If you place an additional taxable truck on the road during any month other than July, you are liable for 2290 taxes on it, but only for the months during which it was in service. You must file Form 2290 for these trucks by the last day of the month following the month the vehicle was first used on public highways. You can find out when Forms 2290 are supposed to be filed in the table below, When Your Taxes Are Due.

Your Taxes Are Due Dates:

IF, in   this period, the

  vehicle is first used during

Then,   file Form 2290 and

  make your payment by*…

July

August   31

August

September   30

September

October   31

October

November   30

November

December   31

December

January   31

January

February   28

February

March 31

March

April 30

April

May 31

May

June 30

June

July 31

*File by   this date regardless of when state registration for the vehicle is due

These due date rules apply whether you are paying the tax or reporting the suspension of tax. It is important to file and pay all your 2290 taxes on time to avoid paying interest and penalties.

How will I know the IRS has received my return?

After they accept your return, you will receive an e-mail notification from us. You will also have access to an electronic version of the Schedule 1 containing a watermark of the e-file logo in the background. The Schedule 1 can be printed from your own computer either from the same e-mail or from your www.TaxExcise.com account.

How do I make corrections to my e-filed return?

You can e-file Form2290 Amendment for corrections to weight, mileage and/or VIN. However, if you make another type of error on your e-filed and accepted return, you will need to make corrections on a paper Form 2290 and mail it to the address shown in the Form 2290 instructions.

If I buy another truck after I have e-filed my 2290 for the current tax period, should I e-file my original 2290 again and simply add the new vehicle to the Schedule 1?

No. If you e-file your 2290 and list the vehicles you own on the Schedule 1, then subsequently buy one or more additional trucks, you must file a new Form 2290 listing only the new vehicles. You may e-file that 2290 anytime before the last day of the month following the month the new vehicle was first used on public highways. Review the table above to find your due dates.

May I file one 2290 for two trucks that I place on the road in two consecutive months?

No. The amount of tax you owe depends on the month when you first placed your trucks on the road. In this case, you should file two Forms 2290, one for each vehicle and its partial tax period, and complete a Schedule 1 for each. Your tax will be more for the truck that was placed into service first. In the next tax year, you can file one 2290 for all the trucks you will have on the road for the 12 months of the tax year; that is, between July 1 of the current year and June 30 of the following year.

   When I submitted my Form 2290 electronical

ly, I received an online duplicate filing error. Why did this happen?

When you submitted your return, the system detected that you had already filed a return under the same EIN, for the same tax period, for the same vehicle(s) and/or the sameVIN category. Check your return to make sure you are reporting new vehicles only and that the other information you input is correct.

Can I claim a refund electronically for a vehicle that was sold, destroyed or stolen during the tax period?

Yes. You can claim a credit for the tax paid on the next Form 2290 you file in the same or subsequent tax period. Alternatively, a refund of the tax paid can be claimed on Form 8849, Schedule 6, Other Claims. The refund amount will depend on when the vehicle was sold, destroyed or stolen.

Can I claim a refund electronically for a vehicle I used less than 5,000 miles during the tax period?

Yes. If you already paid the tax on a vehicle you used for less than 5,000 miles, you can claim a credit on the first Form 2290 you file for the next tax period. Alternatively, you can claim a refund of the tax paid on Form 8849, Schedule 6, Other Claims. However, a credit or claim for this refund cannot be filed until the next tax period.

A credit, lower tax, exemption or refund is not allowed for an occasional light or decreased load or a discontinued or changed use of a vehicle.

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SenaDev

Sena Dev : Tax Advisor.... at TAX2290.COM For any further support reach our Help Desk at 1-866-245-3919 or simply email your queries to... (show bio)

File Income Tax Return In India Without Penalty Till 31st March

Every Individual whose income exceeds maximum taxable limit is required to file Income tax Return on or before the due date.

Due date for Individuals getting salary and who are running their own business or profession or working as free lancer are required to file tax return on or before 31st July, every year.

In case of Individuals who are required to get their books audited and Companies, the last date for filing return is 30th September

Have you missed the tax filing deadline of 31st July, Don't worry, you can file returns till 31st March.

The last-minute rush of filing tax returns is over. Most people manage to file their Tax returns on time. Yet, there are some who, for one or the other reason, fail to do so. If you are among the latter, You can still file your returns and chances are you won't have to pay a penalty.

The return for income earned in the financial year ending on 31 March should ideally be filed by 31 July for non-business taxpayers. But if the taxpayer has missed the deadline in spite of having four months in hand, he can do so till 31 March.

In such a case, the penalty to be levied would depend on the status of the tax to be paid.

If Income tax is already paid either as advance tax or TDS

If you have paid your taxes as advance tax or TDS ( Tax Deducted at Source)has already been deducted then, you don't have worry to because you can file the tax returns before 31 March without paying a penalty.

But if you miss the new deadline and file the return only after 31 March, the assessing officer may impose a penalty of Rs 5,000 for late filing of return.

This amount may depend however depend on the discretion of the assessing officer.

So it is advisable not to delay filing your Tax Return and file it before 31st March.

If tax has not been paid or short paid

If you have not cleared the taxes due or you have short paid your Income tax then, you will have to pay a penalty at the rate of 1% per month for the period after 31 July. If the tax due is more than Rs 10,000, you are supposed to pay an advance tax on your income in three tranches. In such a case, the 1% penalty per month will be applicable from the period you have not paid the tranche.

Is E filing of Income tax Return Compulsory.

E-filing of tax return is compulsory for all tax payers whose taxable Income Exceeds Rs 10,00,000/- (Ten lacs)

File Income tax Return and get more tax planning tips at IncomeTaxReturnIndia.com. Get Income tax tips to reduce your Income tax Liability and get early Income Tax Refunds

Article Source: http://EzineArticles.com/expert/Sapna_R_Gupta/1489506

Investing in Alabama Tax Liens and Tax Deeds

In all 67 Alabama counties, property taxes are due October 1 and become delinquent on January 1 the following year. Once property taxes become delinquent for a property, a tax lien is placed on the property until the taxes are paid in full by the property owner. All Alabama tax lien sales take place in late April or early May. In Jefferson County alone, Alabama's largest county, over 4000 tax lien certificates worth over $2 million are sold. In the State of Alabama, the guaranteed interest earned on a tax lien certificate is 12 percent per annum, starting the day of the tax lien sale.

Generally, the tax lien sales are held on the county courthouse steps and the premium bidding method is used. In a premium bidding method, each property is started at the minimum bid, which is usually the sum of property taxes, the accumulated interest on those taxes, and any sale administrative fees, such as advertising the tax lien on the property in the local newspaper. Starting at the minimum bid, investors take turns bidding up the tax lien certificates until there is only one investor remaining who is willing to pay the highest "premium" on the tax lien certificate. Most Alabama county tax auctions start on a Monday and they will continue on consecutive days until all land parcels have been publicly offered.

The purchaser of a tax lien certificate has the right, but not the obligation, to pay subsequent property taxes on the property each October 1. If the investor allows the subsequent taxes on the property to become delinquent, the tax lien certificate (in the amount of that year's taxes) will be offered again in the April or May sale. If the purchaser holds on to the tax lien certificate, pays all subsequent property taxes for a full three years following the initial tax sale, and the property owner (or other interested party) does not redeem the property (pay all accumulated taxes), the tax lien certificate holder has a right to the tax deed on the property.

All tax lien certificates that did not receive any bids at a county tax sale are assigned to the State of Alabama. These tax lien certificates are often referred to as Over-the-Counter (OTC) or Assignment Purchasing liens. The same "redemption period" is used for these tax lien certificates, which means any tax lien certificates that have been in State inventory for over three years will be offered as tax deeds. Both tax liens and tax deeds in Alabama's state inventory are available for purchase by any private investor. For an OTC tax lien/tax deed list from every Alabama county, go to the Alabama Department of Revenue Property Tax page.

An investor must submit an application to the State for each property for which they have an interest. An investor may submit as many as 20 applications. Instructions and application forms are on the page referenced above. The lists are updated at least once a week. Like any investment, it is important that any investor does their research and due diligence on each property. If a land parcel stays in the State's inventory for more than five years, it is a possibility that an investor can obtain the tax deed to this property for less than the amount of taxes due.

Unlike some other lien states in the United States, tax lien certificates convert into tax deeds after the three-year redemption period without the tax lien certificate holder having to start the foreclosure process on the property. Instead, this tax deed received pursuant to the Alabama process is the result of an administrative foreclosure and does not guarantee a marketable title. So, a quiet title action may be required to gain an insurable title.

To give you an idea of some counties you may want to invest in, I will give you the five most populated Alabama counties below:

• Jefferson County - 656,700
• Mobile County - 404,157
• Madison - 304,307
• Montgomery - 223, 571
• Shelby - 178,182

There is definitely a lot of opportunity when it comes to tax lien and tax deed investing in Alabama.

If you are new to tax lien and tax deed investing, or even if you have experience, you'll want to visit [http://www.uspropertytaxsales.com/]. There is a ton of free invaluable information accessible from this Web site. The Tax Lien Lady is a tax lien investing expert who will be your guide in the world of tax lien investing. You owe it to yourself to download and educate yourself with her amazing and free seven-part video tutorial.

Article Source: http://EzineArticles.com/expert/Russell_Hall/216098

Avoiding Penalties: What to Do If Taxes Can't Be Filed on Time

Everyone knows that federal income taxes are due on April 15th of every year, but what happens if there is a problem completing the return or paying on time? Many assume that the consequences will be harsh, but that is not always the case. The key is to take some simple steps prior to the deadline so that the Internal Revenue Service knows that the process has at least started. Doing nothing at all can result in serious problems, so be sure to contact the IRS if there will be a delay.

Request a Filing Extension

For those who cannot file a return by the April 15th deadline, there is a possibility to obtain an automatic four-month extension. Approximately six million citizens utilize an extension every year. To file for an extension, fill out Form 4868, an Application for Automatic Extension of Time to File a Tax Return. This will need to be turned in by the regular deadline for filing income taxes. This will provide the taxpayer with a new deadline of August 15th.

If more time is needed, a second extension can be requested by filling out Form 2688. It must be filed by August 15th in order to be considered. It will be necessary to provide a probable reason for the extension. If the extension is granted, it allows for a deadline of October 15th to file.

Keep in mind that an extended deadline does not allow for a longer time to pay taxes. If money is owed to the IRS, an estimated payment will need to be sent with an extension request. At least 90 percent of the bill will need to be paid in April. Otherwise, there is the probability of incurring penalties and interest for any amount that is not paid.

What Happens If an Extension Is Not Requested?

For anyone who does not make this request to the IRS by April 15th, they can impose a stiff penalty of up to five percent for each month not to exceed 25 percent. Interest will also be applied to the money that is owed.

What If the Money Owed Cannot Be Paid?

There may be instances in which it is difficult to make the required payment to the government. If the full payment cannot be remitted, send in as much as possible with a filed return. There is a much worse penalty for not filing at all than for not paying after filing. A penalty can be as much as 25 percent for not filing at all.

Paying taxes is an inevitable task for everyone in the country. It is important to file on time and pay what is owed. Make sure to always pay attention to due dates and file extensions if necessary. If a large bill is expected, consider putting some money into a special bank account dedicated to taxes. This will help prevent any surprises from appearing.

When considering filing taxes, Yreka, CA residents visit Hofmann Tax & Bookkeeping Service. Learn more at http://www.hofmanntax.com/.

Article Source: http://EzineArticles.com/expert/Andrew_Stratton/83489

IRA Income - Higher Retirement Income Equals Less In Taxes?

If your IRA income goes up will you pay more in taxes or less? Usually more! I am not a CPA but with some common sense and careful thought we can decrease your taxes due and increase your IRA income!

If you are a CD investor at the bank and take IRA income you might be able to lower your taxes due. How? Let's take a look.

For example, if you are taking income in the amount of $30,000 per year and you have $220,000 invested in CD's that are not in an IRA consider this idea for example and see if it might fit into your exact situation. You might be taking way more IRA income or have way more money in CD's to work with.

Since I am not a CPA and like to work with easy round numbers let's make it easy for all of us. Your taxes due at 25% of $30,000 would equal $7,500. If you were also earning interest on your CD at 3% you would pay $1,650 on the $6,600 earned from your CD each year whether you take the money out or not.

What if we lowered the need for your income withdrawal to $15,000 by annuitizing all or part of your CD?

You annual payments could easily equal $15,000 plus your missed CD money per year and since you would be getting part of your principal back you would still only pay around $1,650 a year in taxes. You would save $3,750 on your IRA income taxes and saved money is made money so really you end up with $33,750 in IRA income each year plus we could always increase your income to replace the lost CD interest if you need it as well. If not then we would just leave that money in the investment. You might even drop into a lower tax bracket and save even more.

In this idea your IRA can then grow much faster to replace your CD value. You get more money, less taxes, higher growth in your IRA, and at least half of your IRA income is guaranteed now at a certain rate. Your monthly stream of new money can also pass on to your heirs in most cases. Sound good?

If you are interested in taking a look at this idea be sure to check with a competent annuity professional. Most agents and brokers have never annuitized an annuity and don't truly have a grasp as to when it is a good idea due to lack of experience. Be sure to ask about how much experience they have in working with annuities. And remember, there is never a bad time to make more money!

Keith Dennis works exclusively with small business owners to help them create tax-free income streams for retirement. Business owners are often stuck in the tax-deferred investment trap. They get a small break now and then end up paying much higher taxes later because they lose their business deductions. Then on top of that, their income is usually 100% taxable!

With tax-free investing you can literally have twice the income in retirement saving the same amount of money, retire sooner, or even save about half as much versus tax-deferred investments.

Get it touch with Keith today to learn how it works through the Small Business Retirement Group's Fan Page.

Article Source: http://EzineArticles.com/expert/Keith_Dennis/175155

How to Compute Cash Flow and Sales Proceeds Before and After Taxes

The primary purpose real estate investors own income property is to make money; favorably from a steady stream of cash flow generated by the property on a monthly basis as well as a lump sum profit when the property gets sold sometime in the future.

This is the explanation for real estate investing. To buy investment real estate with an "income stream" that regularly generates more rental income than operating expenses and debt service, and to collect sizable proceeds due to the property's appreciation in value upon sale.

Fair enough. But real estate investors consider more than these cash flows and proceeds before taxes. They are also concerned how much they can expect to collect after they pay federal income taxes.

In this article, we'll look at both so you will have an understanding of how they are computed in a real estate analysis.

In essence, both work the same way. The revenue investors collect prior to income taxes is known as the "before tax" (BT) revenue, and the amount of revenue an investor actually can keep after settling up with the IRS is called the "after tax" (AT) revenue.

Cash Flows

Cash flow before tax (CFBT) is rental income less operating expenses less debt service (i.e., the mortgage payment) less any non-funded capital additions.

Rental Income

less Operating Expenses

less Debt Service

less Non-funded Capital Additions

= CFBT

Cash flow after taxes (CFAT) is derived by computing tax liability based upon taxable income and then subtracting that amount from CFBT. Okay, so let's break it down.

Taxable income is net operating income (rental income less operating expenses), less the mortgage interest expense and amortized points, less depreciation. It should also be noted that any interest earned by the investor due to the property's revenue would in turn be added (which we'll ignore for our illustration).

Net Operating Income

less Interest Expense

less Amortized Points

less Depreciation (real property and capital additions)

= Taxable Income

Tax liability is taxable income multiplied by the investor's marginal tax rate (combined federal and state income tax rates). In this case, when the taxable income is a positive amount there would be a tax liability, whereas when it is a negative amount there would be a tax savings. In other words, if income is earned after allowable tax deductions, the investor will have to pay taxes and therefore has a tax liability; if no income is earned, the investor can deduct a loss from his or her income taxes and therefore has a tax savings.

Taxable Income

x Marginal Tax Rate

= Tax Liability (or savings)

The final computation,

CFBT

less Tax Liability

= CFAT

Or,

CFBT

plus Tax Savings

= CFAT

Sales Proceeds

This is the amount the seller can expect to receive once the property is sold.

Sales proceeds before tax virtually represent the dollar amount the seller will collect from escrow at closing. It is the sale price of the property less cost of sale less loan repayment (i.e., balance remaining on the existing loans).

Sale Price

less Cost of Sale

less Loan Repayment

= Sales Proceeds (BT)

Sales proceeds after tax are the sales proceeds before tax less the taxes the investor must pay the IRS due to a sale of the rental income property.

Sale Proceeds (BT)

less Taxes Due to Sale

= Sales Proceeds (AT)

Taxes due to sale is a combination of the recapture tax (or Cost Recovery Recapture) and the capital gains tax less tax savings due to unamortized loan points multiplied by the investor's marginal tax rate.

About the Author

James Kobzeff is the developer of ProAPOD. A leading provider of real estate investor software solutions since 2000. Create cash flow, rates of return, and profitability analysis presentations to evaluate any-size investment opportunity in minutes! Easy and affordable. Learn more at =>www.proapod.com

Article Source: http://EzineArticles.com/expert/James_Kobzeff/35775

IRS Tax Debt - Even Government Employees Can Lose Their Jobs Due to Their Tax Debt

The Few: Government jobs are hard to get. There's a waiting list a mile long. But when you finally land that job, you have to be careful. Did you know being in debt to the IRS can actually make you lose your job? Then you'll be broke and still be in debt. If you work for the government, watch out. This scenario could easily happen to you.

What They'll Do:

Bank Levy: This is a common way the IRS collects their money. Ignore the IRS's "Final Notice and Intent to Levy," and the IRS might seize the money you owe right out of your bank account. In one fatal swoop, all the money you've saved up for years could be gone.

Wage Garnishment: This is a bigger danger to you and your job. The IRS has to notify your place of employment when they decide to garnish your wages. If you fall into the category of people that cannot be in debt to a government entity, this could cause you to lose your job. Although usually, you'll get a limited amount of time to resolve the debt, first.

Don't Delay! You can't lose your job. So you need to know how to remove an IRS debt, and quickly! But nothing with the IRS can go fast. Especially when you're not a professional. Remember, you're dealing with people who are skilled and trained in IRS procedure. But here are some methods for beating your debt.

Installment Agreement: Try paying monthly. Everyone has the right to apply for this program. The IRS will need to know your full and complete financial information. They will compare that to the amount of money you spent on your basic needs. Then they will determine how much you will pay them each month. This may sound a bit like how you pay your credit card debts, but it's not the same. With your credit card debts, you choose how much you pay each month. But with the IRS, They choose how much you pay each month. And if you default, you will be disqualified from the plan! So you cannot miss even one payment.

Offer in Compromise: Good luck winning this! You do have the option to settle your debt. But don't even bother to try to submit and Offer if your financial situation isn't dire. The IRS will again, check your entire financial situation. If they find you have no assets and absolutely no way to pay your debt in full, they will consider an Offer. The IRS approves only around 2% of the people that apply. So make sure you don't make any small mistakes while filling out the 44 page document.

Getting Lucky: If you take care of your IRS debt before they find you, you'll be one of the lucky ones. For many people out there, it's already too late. Work on your debt now, before the IRS makes you lose your job and your money.

Now You Have The Smoking Gun...Use it!

Richard Close was an IRS-Hitman. He worked as a revenue officer for the IRS and his father was the head of the collections branch for 30 years; so it runs in the family. He left that behind and now he's partnered with Tax Defense Network to help thousands of Americans with their tax problems. He gives the tips and tricks for you to fight the IRS and win! Visit him at: http://irs-hitman.blogspot.com orhttp://www.taxdefensenetwork.com or contact: email irs-hitman@taxdefensenetwork.com or 1-888-248-9058.

Article Source: http://EzineArticles.com/expert/Richard_Close/159875

Concepts To Consider When You Can't Pay Your Taxes

Not paying your taxes on time entails various consequences. If you are having trouble paying your taxes in full, don't let it hinder you in filing your tax return timely. Consider paying as large a percentage of the amount owed or borrow money from others in order to settle your tax liability in full. Filing a return and not including full payment can save you large amounts of penalties and fees. Moreover, payment plans are available and being on a current payment plans avoids IRS collection process which may include, property seizures, garnishments etc. Most CPA firms can advise you on these matters.

These are the ordinary penalties:

· "Filing Failure" penalty

5% per month on the amount of tax due on the return to a maximum of 25%

· "Payment Failure" penalty

.5% per month on the amount of your tax due on the return to a maximum of 25%

· Both "Filing Failure" penalty and "Payment Failure" penalty apply

The "Filing Failure" penalty lowers to 4.5% per month and "Payment Failure" penalty is

.5% per month. The combined penalty stays at 5%. The maximum penalty for both is 25%. Then, the "Payment Failure" penalty continues at.5% per month another 45 more months. Both penalties can go to a maximum of 47.5%.

Besides the penalties above, interest is charged on late payments. Also when you are self-employed, you take full responsibility for paying the taxes as money is earned through the year.

Payment extensions are provided when it can be proven that unwarranted hardship exists. Inconvenience caused by paying the tax isn't enough grounds for unwarranted hardship. The taxpayer must show that paying the tax would cause significant difficulty and/or expense. For example, a fire sale, selling property at an extremely discounted price, since the person faces the difficulty of paying taxes.

When a payment extension is granted, interest is still charged but the "Payment Failure" penalty is waived. The payment extension is usually good for six months from the due date of the return. The IRS will lengthen time allowed for a payment extension due to some circumstances..

To apply for a payment extension use Form 1127. Form 1127 requires a taxpayer to provide detailed statements of; assets and liabilities, statement income for each of the 3 months prior to the due date of the tax return and statement expenses for each of the 3 months prior to the due date of the tax return.

Paying Income Taxes With Borrowed Funds

Borrowing money to settle tax obligations is an option. Here are some various scenarios:

· Loan From Individuals

Borrow from relatives or friends. Interest rates are probably lower.

· Loans From Banks Or Other Commercial Institutions

Interest on this type of loan is usually considered a non-deductible personal interest expense. Typically a financially troubled taxpayer has a hard time to qualify for this type of loan.

· Home Equity Loan

Interest rates may be lower than with other types of loans. The interest payments may be tax-deductible. This is usually the cheapest option.

· Credit Card

There are a number of companies approved to accept credit cards or debit cards to pay income tax. Note, interest charges may be high and is usually considered a non-deductible personal interest expense. On top of this interest, the companies approved to accept credit cards or debit cards to pay income tax charge a service fee.

Monthly Payment Agreement Request

File form 9465 to apply for a monthly payment agreement with IRS, this can be done online at WWW.IRS.GOV. This process can be done after a hardship extension expires. Form 9465 requires less information than Form 1127 regarding the hardship extension. No financial statements are required if tax due is under $50,000.

When the amount owed is more than $50,000 Form 433-A Collection Information Statement for Wage Earners and Self-Employed Individuals is required. This form helps the IRS obtain detailed, information about you. Consider consulting a CPA Firm about allowable expenses and national living standards that correspond to Form 433-A.

There is a fee for the monthly payment agreement and it is deducted from the first payment if the request is approved. When the payment agreement request is approved, interest on any tax due date is still imposed. However the "Payment Failure" penalty is reduced to.25 % instead of.5% if the return is timely filed.

The monthly payment agreement has a fee of $120. The fee is reduced to $52 when a person permits the IRS auto debit from their account. In the event the taxpayer qualifies as a low-income the fee is reduced to $43.

Monthly Payment Agreements may be terminated if IRS thinks the probability of obtaining payments are at risk. The IRS will also terminate a monthly payment agreement if the financial information supplied was not accurate or complete.

Other reasons for terminating the agreement are the following:

• Failing to make a monthly payment.

• Failing to pay another tax liability when it's due.

• Failing to provide updated financial information.

• IRS finds out that your financial condition has improved.

A written notice will be sent by the IRS 30 days prior to changing or terminating a monthly payment agreement. IRS will also provide the grounds for changing or terminating a monthly payment agreement. The requirement for written notice does not apply when the IRS believes the collection of tax owed is at risk.

Thus, it is very important that tax returns are filed properly even if full payment cannot be made. Options like hardships extensions or monthly payment agreements may be availed to prevent further charges, penalties and other serious consequences.

We hope this article was helpful. This article is an example for purposes of illustration only and is intended as a general resource, not a recommendation.

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We can help deal with the IRS and paying your taxes. Accountant Pompano Beach here to help!

Article Source: http://EzineArticles.com/expert/Peter_D._Rudolph/1367050