4 Reasons to File Your Taxes on Time

Let's take a look at the various penalties

   

4 Reasons to File Your Taxes on Time

April 17 is creeping up on us, and if you are a habitual late filer of your annual income tax, you are probably well aware of the penalties you can incur. But if you are (I don’t know how to say this gently) a tax cheat or a wannabe IRS renegade or just have been too busy this year to worry about your taxes, you should think twice about missing the deadline.

Here’s why:

(1) Fraudsters, look out! If fraud is involved, your penalty stacks up to 15% for each month or part of a month that your return is late, up to 75% maximum.

If you are under the mistaken impression that paying federal taxes is “voluntary,” check out the 16th Amendment to the Constitution, which was ratified in 1913.

It states: “The Congress shall have the power to lay and collect taxes on income, from whatever source derived.” Consequently, tax evaders may be subject to criminal prosecution for a fraudulent return, refusing to pay, declining to file a return or pay taxes that are due or making fraudulent or false statements.

Those penalties can mean up to $100,000 in fines and five years in jail!

(2) If you dawdle and miss the April 17 deadline (hey, we have an extra two days this year!), you might be socked with a failure-to-file penalty. That amounts to some 5% of the unpaid taxes for each month or part of a month that you file late. The good news — if you can call it that — is that the IRS won’t charge you more than 25% of the amount of your unpaid tax bite.

(3) For filers who drag their feet more than 60 days past the deadline, your minimum penalty will be at least $135, up to 100% percent of your unpaid tax.

(4) If you don’t file your return and pay your tax by the due date, you may incur civil penalties, which may also apply to understating your tax or a transaction, filing a refund or credit in error, submitting a frivolous tax, or failure to supply your Social Security number or individual taxpayer identification number.

Moral to this story: File on time!


Article printed from InvestorPlace Media, http://investorplace.com/2012/03/4-reasons-to-file-on-your-taxes-on-time/.

©2014 InvestorPlace Media, LLC

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