How the IRS Acts on Incorrectly Calculated Taxes

Posted on September 30, 2023

How the IRS Acts on Incorrectly Calculated Taxes

When calculating your taxes, you need to ensure that you do not claim tax deductions and credits that you do not qualify for. If the IRS processes your tax return and finds that you claimed a deduction or a credit that you aren’t eligible for, they will make the correction and send you a notice indicating the amount due. If this balance is not paid, the IRS will consider it a tax debt and begin charging penalties and interest.

Understatement of taxes, intentional or otherwise, also leads to tax debt. If you are unable to correctly estimate your taxes, it is advisable to overpay rather than underpay.

If you pay more in taxes than you are required to, you will get a refund. On the other hand, if you underpay, you will need to pay the balance within a specified period of time. If the IRS does not receive the balance by the due date, they can begin collection efforts.

If you are not familiar with the laws that impact your taxes or you’re uncertain how to file your tax return, it’s best to hire a return preparer to prevent the possibility of any errors.

Leave a Reply

Your email address will not be published. Required fields are marked *