Very few of us plan not to do our taxes on time, but sometimes it happens. To try and help motivate those of you still waiting to put pen to paper (or fingertip to keyboard), here are a few reasons why filing on time is better than putting it off until later. Courtesy of Daily Finance.
The first reason to file taxes on time is late penalties. There’s no better motivation than trying to keep money in your wallet. The reason there is a monetary fine on late filing is because the filing of national taxes is so important. There’s also been reports that the IRS will hound you harder if you fail to file on time and owe a deal of money – as opposed to those expecting to receive money back. The fine amounts to about 5% of the taxes you owe for every month you delay, with a cap at five months. If you’re not filing on time because you can’t pay the money you know you’ll owe – still file! The fine is significantly less for failing to pay what taxes you owe.
The next reason is delayed reimbursement. The longer you wait to file, the longer it will take for you to receive your return. In essence, you’re giving the government an interest-free loan. Better that money was in your savings account accruing money for you.
Up next is forfeiture of your refund altogether. After a generous window of three years, any money owed to you by the government just kind of…disappears. Whatever happens to it exactly, it no longer belongs to you. Hope you were planning on making a donation to the IRS.
Number four – if you don’t file, the IRS is allowed to file for you! Yes, they will estimate your taxable income and file on your behalf. This is usually not in your best interest, since they won’t be making any deductions. If you do receive a notice that a substitute return has been filed, along with a bill, you will still have a little time to calculate your deductions.
And the last reason is the most compelling: You will lose your freedom. After all the letters, requests (or even a representative sent to your door), the IRS will get serious. This means they could automatically remove money from your wages, seize assets (think vehicles), and maybe even put a warrant out for your arrest for the federal crime of tax evasion.
There really is no valid argument for not filing your taxes on time. So take some time over the next ten days and see it through.