Income tax is an integral part of everyone’s life. You like it or not, at the end of the financial year, IRS wants you to pay your taxes. Moreover, the filing of the tax return should be correct. If there are any mistakes in the filing or you forgot to attach important documents to prove that you were eligible for the IRS relief, you are likely to receive a notice for audit. Majority of people file their taxes at the last minute. Preparing and planning your taxes in just a day or two increases the chances of committing mistakes. Errors can bring you under the spotlight of tax authorities. Therefore, you should prepare and file your taxes in time. Besides omitting mistakes timely filing also allows you to avoid late charges, interest and other penalties.
If you file your tax return after the due date, penalties and interest will keep on accumulating till the time you clear all the dues. If you’re not paying tax from last several years, you might need to face criminal charges as well. Not filing tax is more severe than filing late because IRS can also file tax evasion charges against you. If you start working on your tax preparation earlier, your accountant or whoever is preparing your taxes will get ample of amount to go through your accounts so that he/she can understand them and file tax accordingly. You should provide all the required papers and documents such as bank statements, bills, invoices etc at the earliest so that your accountant can organize them and prepare your tax in timely manner.
Early preparation also allows you and your accountant to try and implement new strategies to save tax. If you file late, get ready for the adverse consequences because you’re not giving your accountant enough time to come up with new and creative strategies to minimize the tax amount. Last minute preparation will give him/her limited time to organize your records and plan your tax filing. Timely filing of tax returns also allows you to keep your business away from any kind of financial disaster. In other words, late filing means your book keeping and accounting is not up to date. This is the biggest hindrance in managing any business which might hit your business badly even if the sales are going fine.
Timely filing also allows in retaining a better relationship with the tax authorities. Unlike late filers, timely filers do not get unwanted attention from the tax authorities. Moreover, if you’re facing some financial issue and file late, you can expect consideration or some leniency from the tax authorities just because your track record is perfect. In case, you’re seeking loan to buy a home or car, lender or bank will ask for your current income information. However, if you’ve filed it late or have not filed it yet; forget about the finance. If you want to reduce your worries and stress, you should file your taxes in time.