Income tax rate = $7500 + 25% of amount over $50,000.
Amount over $50000 is $21,534.
Therefore, tax is given by: $7500 + (0.25 * 21534).
Total tax is $12,883.56.
Challenges
One of the biggest challenges is that a layman cannot understand the extensive language used within the tax return form. This can cause specific challenges especially when entering their tax returns. Although this is much less common for the large corporations which have invested in financially established professionals, it may prove much more difficult for the small business. Where a professional is not brought on board to help with the filing of financial information, it may be difficult to post the returns. This brings about the problem of having to bring onboard third party help to file tax returns. However, it is quite simple to file tax returns where one understands how to navigate the filing system.
Another challenge faced during the filing of the form was the lack of a personal support system where one was unable to understand the filing process. On the IRS website, personal support is not limited as there is depth of material on the subject of filing returns. As a result, it becomes quite challenging to find online support for filing challenges. For future cases, it is possible to have more personal support agents for the help of the individual as opposed to materials. While they may help, personal support is more effective as the individual/corporation may be using similar filing techniques in future to avoid confusion.
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Finally, errors in filing may lead to consequences on the part of the organization. Such punitive actions include civil and criminal actions as well as delays in your refunds. Moreover, it could have negative impacts on the financial credibility of the company. Nevertheless, the IRS provides instances where penalties for late payment will be waived, including the first-time penalty abatement, which could be the case for this organization. Due to the fact that it is its first time to file returns, it could be advantageous due to the specific challenges faced during the filing process. Nonetheless, future payments and filings should be done on time.
