Tax Season 2017 is here and that means that the Federal Government is prepared to issue penalties for mistakes made. And this year many of the penalties have been increased thanks to law changes and inflation. So what do you need to know to avoid penalties beyond working with a professional bookkeeping firm like Hamilton Bookkeeping and a good certified public accountant?
First, don’t forget to file and be sure to file by the deadline date of April 15th or apply for an extension. This year if you fail to file a tax return within 60 days after it’s due including extension time, you will receive a penalty charge of $210 or 100% of the amount of tax due, whichever is less. This amount is higher than in 2016 when the penalty was whichever was less, $135 or 100% of your unpaid tax. This year there are also more penalties for tax preparers. The IRS are on the hunt for any preparers who demonstrate willful or reckless conduct to get the taxpayer’s liability to an amount lower than it should be, the penalty increases to the greater of $5,000 or 50% of the income from the refund or claim.
In 2017 you will also find penalties for inaccuracy in mileage logs or lack of proper receipts for your vehicle, any math errors, home office deduction penalties for reporting falsely the usage or space, and charitable donations may receive penalties if tax payer is audited and they find that the deduction may be denied because there’s nothing specific listed on the slip, like the condition of the items. Giving to a non-profit or charity that does not meet the criteria to be considered a charitable contribution is another area for a possible penalty. These are just a few of the areas that might cause a penalty this year with your tax return.
Need help with keeping accurate records so tax season is stress-free? Hamilton Bookkeeping is dedicated to providing accurate, full-charge bookkeeping for clients who wish to clean up their current bookkeeping problems, begin using QuickBooks, maintain accurate records, and adopt healthy bookkeeping procedures. Contact us today at (978) 468-1661.