Tax Penalties

These are fines imposed by the IRS if you fail to file your taxes, pay taxes, or make errors on your tax return. For freelancers, this could include failure-to-file or failure-to-pay penalties, as well as penalties for underpayment of estimated tax.

What are tax penalties?

Tax penalties are fees imposed by the government on individuals or businesses who fail to comply with tax laws or regulations.

These penalties can be assessed for a variety of reasons, such as failing to file a tax return on time, underpaying taxes, or making errors on a tax return.

How are tax penalties calculated?

The amount of a tax penalty can vary depending on the specific violation and the amount of time that has passed since the deadline for compliance.

For example, the penalty for failing to file a tax return on time is generally 5% of the unpaid taxes for each month that the return is late, up to a maximum of 25% of the unpaid taxes.

Can tax penalties be waived or reduced?

In some cases, the IRS may waive or reduce tax penalties if the taxpayer can demonstrate reasonable cause for the noncompliance.

Reasonable cause may include events such as a natural disaster, serious illness, or other circumstances beyond the taxpayer's control.

What should I do if I receive a tax penalty?

If you receive a tax penalty, it is important to take action as soon as possible.

You may be able to request a penalty abatement or installment agreement with the IRS to help resolve the issue.

It is also important to take steps to avoid future penalties by staying up-to-date on tax laws and regulations and seeking professional tax advice if necessary.

What is Workmade?

WorkMade is an all-in-one banking and accounting app designed specifically for freelancers! WorkMade gives you access to: zero-fee business banking, automated bookkeeping, fast and easy invoicing, and quarterly tax estimations and payments.

About Workmade
An artistic photograph of a freelancer getting paid

The banking app that pays your taxes, finds write-offs and gets you paid fast.

Free to download. Sign up in 60 seconds.

Learn More

Do your thing.

It only takes 60s to

Get Started

Scan to download the app.