Question

Benjamin Franklin is credited with the following quote, “In this world, nothing is said to be certain, except death and taxes.” You read an article about common mistakes made by taxpayers. Question: Explain how having the wrong amount deducted from your taxes could impact your life. Please answer the following question with a minimum of three complete sentences and a maximum of seven complete sentences.

Answer 1

If a larger amount is deducted from us, then we have fulfilled our tax liabilities and we need not worry in terms of penalty. We need to however work a lot to get the excess amount refunded back to us.

If a smaller amount is deduced, then our headache is a lot more serious. We might face civic fraud penalties, negligence penalties, late payment penalties and interest payments that vary from 0.5% of the overdue amount to upto 75% plus interest of the amount overdue. That's a lot of money and a lot of running around filing the correct tax returns, working with IRS personnel and a lot of time wasted.

So its better to invest a good amount of time filing proper taxes instead of worrying about a later headache if a wrong amount is deducted from your taxes.

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