The Failure to File (FTF) (6651(a)(1)) penalty has some interesting aspects to understand when calculating or reconciling. It may seem straightforward but understanding the nuances reveals a complex web of rules and exceptions.
The Estimated Tax Penalty is actually an interest calculation. The underpayment penalty is the difference between your required annual payment and what you've already paid through withholding, credits, and any estimated tax payments. Once you determine the net amount owed, calculating the penalty becomes straightforward, particularly with TaxInterest software.
The key to tracking a Line of Credit (LOC) in TValue software lies in the settings. LOCs are financial products that provide borrowers with access to a predetermined amount of funds, similar to a revolving credit facility.
The Failure to Pay penalties are interest bearing from the notice (or assessment) dates both for the Failure to Pay Tax Shown on Return §6651(a)(2) and the Failure to Pay Amount Assessed §6651(a)(3). TaxInterest software will calculate the interest but only if you complete the inputs for the late payment notices.
Managing seasonal cash flows of a business can be an art and a science. For a lender, the key to success is making life easier for the borrower or lessee. One opportunity for Lenders/lessors is to structure loans or leases with monthly skipped or modified payments when appropriate and creating a win-win for both parties. This structuring can separate you from the competition.