6. Frequently Asked Tax Questions
What is the interest rate that the IRS charges on taxes due? %
2016-3%

7. Interest Calculation Daily from the due date of the return
Payments applied first to tax, then to penalty, then to interest.

8. Penalties
If you owe the IRS a balance, the penalty is calculated as 0.5% of the amount you owe for each month (or partial month) you're late, up to a maximum of 25%. And, this late penalty increases to 1% per month if your taxes remain unpaid 10 days after the IRS issues a notice to levy property.

9. Additional Penalties
On the other hand, if you don't file your tax return on time, the penalty is much more severe. The penalty for failing to file is 5% of the amount you owe per month (or partial month), which combines a 4.5% late filing fee with the 0.5% late payment fee. Now, the late filing fee also maxes out at 25% of the unpaid balance, but the late payment fee can keep running, up to a combined total of 47.5% of the unpaid tax.

10. Non Filing Penalties
Finally, if you filed your return more than 60 days late, the minimum penalty for failure to file is $135 or 100% of the tax you owe, whichever is smaller.

11. Extensions
Also, it's important to mention that penalties and interest can be charged even if you file an extension. An extension simply moves the filing deadline from April 15 to Oct However, if you owe taxes for the year, the amount is still due on April 15. If it's not paid in full by the April 15 deadline, interest and penalties can start accumulating.

12. Estimated Tax Payments
Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and estimated tax payments, or if they paid at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.

13. First time Waiver-3 year window Just Cause
Penalty Abatement
First time Waiver-3 year window
Just Cause

14. Avoidance of Penalties
Planning
Estimates
Tax Professional

15. Tax Reform and You Reduce Corporate Rate from 35% to 15/20%
Plus: Competitive with other world markets
Great Britain-21%
China-25%
Germany-17%
Korea-22%
India-30%
Poland-19%
Possible Repatriation of foreign investment and Profits

16. Downside of Corp Tax Reduced
Reduced tax revenue of $1.8 Trillion over 10 yrs.
Remedy-Border Tax on goods coming in $1Trillion over 10 years.
Shortfall $800 Billion.

17. Reduce Tax Brackets for Individuals to 12%-25%-35%
Currently 6 brackets to 39.6%
Doubles Standard Deduction to $12,700/$25,400 married. Plus for those who do not itemize now.
Larger 0% tax bracket
Eliminates personal deduction for # in family
Hurts family with 4 children/dependents.
To remedy proposing higher child tax credit
Reducing top bracket considered plus for 1%
Cure is Raise upper bracket
Result: Another $1-$1.5 Trillion shortfall over 10years!!

18. Reduce S Corp Tax Rate Income taxed at 25% rate. Owners who pay
S corps/partnerships/self-employed 25% max
Accountants, Lawyers stay at 35% -Never
Income taxed at 25% rate. Owners who pay
Themselves may consider a draw if tax rate is lower

19. Whats the Damage Cost Reduction Corp Tax Rate $1.8 T
Reduction Individual Rates $1.3 T
25% Cap rate S Corp/partners/self $0.4 T
Eliminate Alt Min Tax $0.4 T
Eliminate Estate Tax $0.2 T
Full Expensing Business Assets(5yr) $1.2 T
Total Cut in Trillions $5.3 T

20. How Do We Pay Income Repeal Itemized Deductions other
Than mortgage int. and Charities $1.5 T
Eliminate Business Deduction for
Interest expense $1.1 T
One time Repatriation of Foreign
Earnings $0.2 T
Total increased revenue $2.8 T
Shortfall $2.5 T

21. Solutions Increase Cap Gains Tax and Tax on Dividends
Due to Budget restraints net tax cut cannot exceed $1.5 Trillion.
Congress needs to find $1 Trillion. Even if every possible corporate tax deduction is eliminated it would result in less than $1T.
Good Luck!!