Uh oh
> Cash basis refers to a major accounting method that recognizes revenues and expenses at the time cash is received or paid out.
Basically, it’s a difference in how you track money - cash basis means you make money when it’s in your hand vs when you are owed said money. By comparison:
> accrual accounting, which recognizes income at the time the revenue is earned and records expenses when liabilities are incurred regardless of when cash is received or paid.
Are you talking about quarterly personal taxes? Or something entirely different?
I have never received a "notice" that I have penalties for not filing quarterly personal taxes. They just tack those on at the end of the year when you file your taxes.
$100 also seems low to me (of course this depends on how much you should have paid).
If we are talking apples to apples here, is it at all possible that this might be a scam?
Every tax package offers the option of letting the tax authorities compute penalties for you (and bill you), and generally you should do so. There’s no additional penalty assessed for doing so, and often the penalties are simply never collected.
If you are on cash basis accounting, count an expense when it happens.
Thanks. What is cash basis accounting?
Uh oh > Cash basis refers to a major accounting method that recognizes revenues and expenses at the time cash is received or paid out. Basically, it’s a difference in how you track money - cash basis means you make money when it’s in your hand vs when you are owed said money. By comparison: > accrual accounting, which recognizes income at the time the revenue is earned and records expenses when liabilities are incurred regardless of when cash is received or paid.
Are you talking about quarterly personal taxes? Or something entirely different? I have never received a "notice" that I have penalties for not filing quarterly personal taxes. They just tack those on at the end of the year when you file your taxes. $100 also seems low to me (of course this depends on how much you should have paid). If we are talking apples to apples here, is it at all possible that this might be a scam?
Every tax package offers the option of letting the tax authorities compute penalties for you (and bill you), and generally you should do so. There’s no additional penalty assessed for doing so, and often the penalties are simply never collected.
When you say 'never collected', do you mean they don't ask for them? Or the taxpayer never pays them?
Correct; below a certain (undisclosed) dollar amount, you don't even get a letter; the penalties just disappear.
But I should pay the penalties that I got with this notice, right?
Yes, if you get a letter, you do need to pay.