I did several jobs last year and was paid in cash. I am having remorse because I did not claim them on my tax return. I would like to come clean and claim it and pay the taxes due. The jobs totaled around $40,000, Does anyone has an estimation of what my penalties and interest will be?
Generally, the late filing penalty is 5% of the amount of unpaid tax per month the return is late, up to a maximum of 25% - interest is running at 3%
I hope this helps.
Steven A. Leahy
Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.
As Attorney Leahy points out, this depends more on your tax liability than your income. You will have deductions, and withholding. If you ended up owing nothing, there would be no penalty. The penalty is based on what was unpaid as of the filing date. Withholding from the year is considered paid on the filing date.
If I understand properly you filed but didn't claim all of your Income. You will not be penalized for the underreporting providing you amend the return prior to the IRS catching.g your mistake. The new balance will be subject to penalties and interest as previously noted.
This response is for informational purposes only and is not intended for legal advice. IRS Circular 230 Disclaimer: To ensure compliance with IRS Circular 230, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.