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Top 7 Reasons to File Your Income Tax Returns on Time


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Here are seven reasons for not being late filing your
income tax returns.

1. Avoid Late Filing Penalties

Late filing can result in substantial and continuing
penalties. This is in addition to any interest that is
due.

2. Receive Better Service from Your Accountant

The earlier you get your paperwork to your accountant,
the sooner he can start preparing your tax returns. More
importantly, there will be more opportunities to explore
and implement tax saving strategies. On the other hand, if
you file late, you tie your accountant’s hands. For example,
he may hesitate to retain profit in your corporation if
such profit will be subject to substantial penalties.

3. Avoid Criminal Charges

Of course, if you don’t file tax returns at all for a few
years, you may also face charges of tax evasion.

4. Prevent Bankruptcy

Generally speaking, persons who don’t file tax returns on
a timely basis also lack adequate records for managing
their business. Since they don’t keep their bookkeeping
and accounting up-to-date, they only think they know how
they’re doing and how they stand financially. This, of
course, is a recipe for financial disaster.

5. Enjoy Better Relations with Tax Authorities

Late filers also receive the unwanted attention of the
taxation departments. Non-compliance can result in audits,
aggressive collection action and legal proceedings. In
addition, if you ever do have extenuating circumstances
that might call for some leniency or extraordinary
consideration on the part of the tax department, you are
more likely to receive it if you have a flawless history
of co-operation and compliance.

6. Obtain Financing

You’ll have difficulty obtaining financing if you can’t
provide your financial institution with current income
information. Assessment Notices from taxation authorities
give banks more assurance that the income claims you make
are true. As well, if you haven’t filed your current income
tax returns, what hidden tax liabilities exist? What is the
state of your record-keeping? How do you run your business
without adequate financial information? Your bank may
hesitate to loan you money or refinance under these
circumstances.

7. Reduce Stress and Worry

Many people who are late filing their tax returns feel
guilty about it. At the back of their minds, they worry
about taxation authorities contacting them, audits, asset
seizures, criminal prosecution, penalties and interest, and
so on. Some of these worries can become magnified beyond
what the actual situation warrants. Save yourself
unnecessary stress by filing your income tax returns
on time.

RESOURCE BOX

J. Stephen Pope, President of Pope Consulting Inc.,
has been helping clients to earn maximum business profits
for over twenty-five years.

For profitable Work at Home Small Business Ideas,
visit http://www.yenommarketinginc.com/

To learn how to reduce your income taxes, visit
http://www.yenommarketinginc.com/income-taxes.html

Article Source: http://EzineArticles.com/?expert=J._Stephen_Pope

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  • Posted On January 8, 2007
  • Published articles 283513

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