Tax Secret #1
FILE ALL IRS REQUIRED TAX RETURNS ON TIME!
This might sound brain-dead simple, but when people don’t have the money to pay their taxes, a large percentage of taxpayers delay and do not make the IRS filing deadline. Even if you don’t have the total amount due, send a $1 like this.00 and file your taxes on time!
So many people do not realize that the IRS charges you a penalty of up to 25% FOR JUST FILING YOUR TAX RETURNS LATE. That’s right, 25% of what you owe. This includes Individual tax returns and payroll tax returns.
What people do not know is if they file their tax returns on time they can avoid the 25% penalty even if they do not send in the money, which is owed on their tax returns. Sending “as much as you can” is better than nothing and shows a little good faith. But definitely do not “not file” …the IRS doesn’t forget and they will come back to contact you later and you’ll owe a lot more.
Of course you will get a follow up notice in the mail from the IRS for not sending in the money owed, but so what, you would have avoided a 25% penalty!
As a Dayton tax preparation professional, I see THIS problem so often each tax season. It sounds simple, but I could have saved people many thousands of dollars over the years in penalties if they just knew this one thing. So, in the future, if this happens to you — no matter what is going on in your life, take the extra time to file all tax returns on time, even if you do not send in the money owed with the return.
To get more tax tips, sign up for our free Financial Success Letter using the form on this page. When you do, you’ll get our Subscriber-Only special offer for tax preparation and accounting services.
– Paulette Marshall
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