The Cost of Unintentional Tax Filing Errors and How to Avoid Them

1
The Cost of Unintentional Tax Filing Errors and
How to Avoid Them
2

• Whether you file your own business taxes, or have
  a professional take care of them for you,
  unintentional mistakes can easily be made, but
  when it comes to the IRS, there are simply no
  excuses.
• Generally speaking, if youve hired a tax
  professional to file on your behalf, the chances
  of them making a mistake that could result in a
  stiff penalty from the IRS, are few and far
  between. Unintentional errors when filing small
  business taxes are typically made by individuals
  seeking to reduce their overheads by handling
  their own taxes, and the grim reality is that
  this cost saving venture, often turns out to be
  exactly the opposite.

3

• Avoiding unintentional errors when filing your
  business taxes is made easier by hiring a tax
  professional, but if you choose to file yourself,
  here are some of the most common error inducing
  issues youre likely to face
• Late filing and underpaying
• Carrying separate penalties, in a worst case
  scenario filing late and underpaying can amount
  to 47.5 of the original tax owed.
• Under reported taxes
• The IRS can fine you as much as 20 of any under
  reported taxes should you make a mistake when
  filing that results in a tax liability in your
  favor, and this can double if you make a faulty
  appraisal for items such as donated property.

4

• Writing bad checks
• Whether a check or any other mode of payment to
  the IRS, if its declined, it will incur a 2
  penalty.
• Failing to file a checklist
• Before claiming certain credits, you must file a
  two-page due diligence checklist failure to do
  so may result in a fine of 245 per credit.

5

• Tax filers may also slip up and incur penalties
  when failing to comply (unintentionally or
  otherwise) with foreign tax laws. Originally
  intended to put an end to drug dealers,
  terrorists and tax cheats, many regulations are
  still in force, and are applicable to an
  increasing number of U.S. taxpayers working,
  living or retired abroad. Below are some foreign
  tax compliance issues U.S. citizens may face
  penalties for
• Passive foreign investments
• You are required by the IRS to file Form 8621 if
  you own mutual fund shares incorporated overseas.

6

• Personal holding companies
• Form 5471 must be filed for a corporation created
  to hold a foreign property.
• FBAR
• The FBAR form must be filed electronically if you
  have 10,000 or more in any combination of
  international bank and brokerage accounts at any
  one time of the year.

7

• FACTA Disclosures
• Designed to help in the fight against money
  laundering, FACTA disclosures cover all foreign
  financial assets, and include both insurance and
  retirement assets. If your threshold is higher,
  beginning at 50,000 in assets for single U.S.
  residents and up to 40,000 for couples living
  overseas and filing joint returns, there will be
  additional requirements to FBAR alone.

8

• Claiming not to understand tax laws is no excuse
  in the eyes of the IRS, and stiff penalties will
  apply for anyone making errors when filing,
  unintentional or otherwise. Why not eliminate the
  risk of costly fines by outsourcing your tax
  requirements, and thanks to their expertise and
  insider knowledge, you may also end up paying
  less in taxes, too.
• At Heyer Inc, we proactively assist our
  individual and small business clients in meeting
  their goals. Our key area of focus is ensuring
  that our clients remain compliant with federal
  and state tax laws by providing them with high
  quality accounting and tax services Miami. If you
  are looking for an individual accountant in
  Miami, heyer inc would be a right option.