With tax deadlines looming on the horizon, you may be wondering if there is any way out of the yearly headache of preparing and filing your income taxes. Does everyone have to file every year? What happens if you don’t file? Read on to find out what our group of experts had to say on the topic.
No advantage to not filing taxes with the IRS
Unless you find losing all your possessions, accompanied by a long stint in a federal prison attractive, as a U.S. citizen, you must file a federal income tax return every year.
If you fail to file your taxes, interest on the debt, fines, and penalties begin to accrue. You will owe even more money once the Internal Revenue Service finds you, and they will find you. If there is one thing the IRS does better than any entity on Earth, it’s finding people who owe them money. Employers, banks, and brokers all send information to the IRS, and some of that information will invariably be about you. Simply put, there is no advantage to not filing taxes with the IRS, ever. The longer you wait to file, the more adverse the repercussions when they do get around to you, and they will get around to you.
Not filing a tax return is never beneficial
You might end up making yourself [subject] to punishments or fines. Failing to file tax returns can result in hefty penalties like [owing] 0.5% to 25% of the unpaid tax per month. Failing to file a tax return can also be classified as a federal crime. Such an act is punishable as a misdemeanor or felony.
The most significant risk of not paying your tax is that you will make yourself ineligible for any refunds. You have three years from your due date to file your taxes and claim your refund. Refunds that are not claimed are automatically sent back to the government. Hence, there are not only zero benefits of not paying your taxes, but also you miss out on any advantages that you originally had.
It’s best just to do it
Not everyone has to file a tax return, but the IRS does have filing requirements for most taxpayers, meaning it’s a good idea to file a return even if you don’t owe any tax (just to be safe).
The benefits of filing a tax return are just too good to ignore. If you don’t actually owe anything at the end of the year, but you paid taxes from your income throughout the year, you [may be] eligible for a refund. If you don’t file a tax return, you aren’t going to benefit at all and may even experience some issues. It’s best just to do it.
Donna Tang
Donna Tang from CreditDonkey. She is an Entrepreneur and budgeting expert, graduated from the University of California, Los Angeles.
You must file to avoid penalties
There are no known benefits for not filing a tax return. Instead, you will be penalized for not returning the taxes that you owe to the government.
There are some conditions where you are not required to file a tax return – you’re younger than 65 years and single, you’re not employed, and you earn less than $12,400 a year. Also, if the IRS owes you a refund, you’re not required to file taxes. [Otherwise,] you may be required to file tax returns, and you must file them to avoid penalties.
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