The Importance Of Filing Your Tax Each Year

Nobody wants a bad record from the IRS. If you want to be a good and responsible taxpayer, you have to ensure that you should file your taxes promptly to avoid any problems in the future.

If you’re someone who wants to keep a good record, you might be feeling a bit uneasy as the deadline for the tax season draws nearer. Even if you feel like skipping tax filing because you think the IRS won’t notice you, you’re actually cooking up a recipe for trouble.

The IRS can notice that you’ve been skipping filing your taxes as it will always come across your record. For this reason, it can result in expensive penalties that might be higher than you owned initially. This is the reason why you should always have your own tax preparation checklist and be responsible in filing your taxes yearly.

Below are the other reasons why it’s important to file taxes every year:

  1. Avoid Penalties

If you did not file taxes, you’ll get yourself in trouble because you won’t be exempted from paying a penalty. In case you’re lucky to obtain a filing extension and you still can’t pay your taxes, you might get penalties because of late payments in many cases. All penalties imposed for late payment and failure to file taxes apply with interests that an individual owes on the unpaid tax balance.

If taxpayers take more than 60 days to file their taxes, they need to pay the penalty. If the taxes owed are smaller than the penalty, they’ll have to pay the tax unpaid 100 percent. Otherwise, the penalty might be as high as 5% from every month’s unpaid tax up to a maximum of 25%. In case there’s a refund due for taxpayers, they won’t be penalized for late filing.

Taxpayers are always reminded by the IRS about the reasons to file taxes yearly. Moreover, taxpayers are given with different helpful options that could aid them if they face troubles when paying their tax payments.

It doesn’t matter if you can pay the entire amount or not, you’re still obligated to file your taxes as early as possible. Once done filing, you must try paying the remaining money at the soonest date. The reason behind it is that when you file your taxes sooner, you won’t find yourself under hot water.

Stack file folders with documents on background

  1. Filing Taxes Yearly Is A Sign That You’re Responsible

The government mandates that people who earn a particular amount of their yearly income should file taxes within a due date. The taxes as calculated should be paid by the taxpayer. As mentioned above, not being able to pay taxes may result in penalties.

If you want to be a responsible taxpayer, you should file your tax every year. Not only that, it makes it easier for you to enter any subsequent transactions since your income is recorded by the IRS. It may also come in handy if you’re applying for a loan.

  1. Avoid Tax Extensions

Filing taxes yearly can help you avoid filing an extension. Oftentimes, extensions are necessary due to disorganization more than the financial need. Several people who wait until the last minute to file returns simply require time to gather receipts or look for additional deductions.

If you push the process close to the deadline of filing, you might end up asking for help from a tax professional who can sort out your finances as well as complete your filing. If you file for a tax extension but don’t pay what you owe if you have a due balance, the IRS will charge you penalties and interest on the outstanding tax debts until it’s paid in full. To avoid this situation, make sure to prepare for your taxes as early as possible.

  1. Face Less Competition When Asking For Help From Tax Professionals

One important reason to file your tax yearly is that you won’t have to face tough competition when accessing tax professionals. Take note that it’s hard to get on a good tax professional’s schedule during crunch time. As a matter of fact, if you have not set an appointment with a professional, you might need to file for an extension.

In addition to that, several tax professionals may charge more to complete your taxes as the deadline of filing approaches. A good way to avoid all of these hassles is to get an appointment with your advisor immediately.

Bottom Line

Some people may think that not filing their taxes yearly can help them escape their responsibilities. But, as a taxpayer, you should know that there are tax laws in every state and these would just make things complicated for you. This is especially true if you need tax professional services and you can’t find one because they’re already booked. So, if you could pay your taxes yearly and as early as possible, why waste your time or energy being summoned for jail time or late payments for not paying taxes on time? So, make sure to keep in mind the important reasons mentioned above when it comes to filing your taxes each year.

 

 

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