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The Complete Idiot's Guide® To Accounting by Lita Epstein, Shellie L. Moore

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Avoiding Tax Penalties

You certainly want to avoid having to pay penalties and interest. Your tax bite is high enough. The only way to avoid penalty and interest charges is to be sure your payments are made in a timely manner.
A company may have a hard time estimating the full quarterly tax bill because so many variables exist. If you are unsure of your liability, you are better off making slightly higher payments each month rather than getting socked with penalty or interest payments at the end of a quarter because you underpaid your taxes. If you’ve overpaid, it’s much easier to pay less on the last payment that quarter than to risk being hit with penalties or interest for underpayment of taxes. Penalties can be as high as 20 percent of the ...

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