To avoid penalties and fines, taxpayers must abide by a number of IRS laws and regulations. The 15-day rule, which is applicable to both organizations and people who have received an IRS notice, is one of the most significant regulations.
The IRS must receive a response from taxpayers within 15 days of receiving a notice of deficiency or a notice of demand for payment under the 15-day rule. If the taxpayer does not reply within 15 days, the IRS will take legal action against them, which may include asset seizure or wage garnishment.
Taxpayers should be aware of the 2021 standard deduction in addition to the 15-day rule. The amount of money you can make before you must pay federal income tax is known as the standard deduction. The standard deduction for single people in 2021 is $12,550, while for married couples filing jointly, it is $25,100. If they choose to itemize their deductions, taxpayers may be able to significantly lower their tax obligation.
You might be asking whether you need to file a corporate tax return if you are a corporation with no income from the prior year. The answer is that you must still file a tax return even if you earned no income. Penalties and fines may apply if this is not done.
Every year, corporations must submit Form 1120, the corporate tax return. The 15th day of the third month after the end of the corporation’s tax year is when Form 1120 is due. For instance, if the tax year for your firm ends on December 31, the deadline for submitting Form 1120 is March 15.
Last but not least, S corporations are exempt from submitting Form 1120. Instead, Form 1120S, the S corporation tax return, must be submitted. The 15th day of the third month after the conclusion of the S corporation’s tax year is when Form 1120S is due.
The 2021 standard deduction, the IRS 15-day rule, and the filing procedures for businesses and S corporations should all be understood by taxpayers. Penalties and fines may apply if these rules are broken. It is advised that you speak with a tax expert if you have any concerns regarding your tax obligations.