Do you know paying your Form 2290 late is more expensive?Puzzled? Yeah, it is like paying extra dollars for your ignorance. If you want to make your tax filings expensive than the normal then go beyond the due date. The IRS is keenly observing the tax filers and their submissions. If you are filing your form or paying the tax rate, then you are attracting the IRS penalties towards yourself.
Types of Penalties and Interests:
As a trucker, we knew the value of the hard earned money and it is not wise to lose your money for not committing a timely action. Check out the penalties and the interests if you fail to pay the tax on time. The IRS has two types of penalties for Form 2290:
- Late Filing –This form of penalty covers 80% of your entire penalty. This happens when you file the Form 2290 after the due date.
- Late Payment – The remaining 20% of the penalty comes under this form of penalty. This happens because of payment absence. Here, you might have filed the Form on time but did not pay the amount, or did not file on time hence did not pay the amount.
|Reason||IRS Penalties & Interests|
|When the tax filer fails to pay the Heavy Vehicle Use Tax (HVUT) by the deadline||The penalty is 4.5% of the total HVUT tax which is due, monthly for up to 5 months.|
|If the tax filer does not file the tax on time and fails to pay the tax due.||1) An additional monthly penalty of 0.5% of the total tax due.
2) Additional interest charges of 0.54% per month accrue as well.
Is Penalties more expensive?
If you still doubt whether the penalties are expensive, then check out the simple calculation to understand better.
For instance, if you owe $ 500 for your tax and failed to file the tax return for 5 months. Then the penalty amount would mount to its maximum by summing all the penalties and interest. Just check out the basic of penalty calculation in order to understand better.
Penalty and Interest Calculation Table:
|Description||Penalty Amount For a Month
|Penalty Amount for 5 months
|Failure to pay the tax penalty for a month (4.5%):||$ 22.5||$ 112.5|
|Late payment penalty (0.5%):||$ 2.5||$ 12.5|
|Additional interest charges (0.54%):||$ 2.7||$ 13.5|
Summing the penalties along with the tax amount you owe: $ 500 + $ 138.5 = $ 638.5
On the whole, you must pay $ 638.5 along with the amount you owe for your tax. The calculation shows that you are paying over 27% extra amount than the normal tax. Remember, the shown calculation is done for 5 months only, if it exceeds more than 5 months then the amount would mount to the sky. This amount could be used for any other purpose and you could have saved if you were punctual. Hence it is always better to file your Form 2290 through etax2290 before the due date of form submission.