#1 Mistake: Not reporting taxable income
When you fail to report taxable income, you’ll have to deal with serious consequences, and these after-effects translate to penalties. Uncle Sam is pretty clear when it comes to these: a failure-to-file penalty is 5% for each part of a month when a tax return is late. However, this could go up to 25% in some cases.
And that’s not all… You could face criminal penalties in the following scenarios:
- Intentionally failing to file a tax return
- Intentionally filing false information
- Intentionally not paying the right amount of tax
- Making a fraudulent statement
- Preparing a fraudulent return
Report taxable income and make sure you’re not missing anything. In general, you have to report the cash and the market value of certain things such as properties or services.
Not sure what items are taxable or not? Click here!
