Filing your taxes is a headache, but skipping them can have serious consequences. When you don’t file taxes, you put yourself at risk of facing fines and penalties. In many cases, you’re also missing out on a refund. If you avoid filing taxes because of personal reasons, it’s best to work with a tax consultant and keep the following in mind.

Why It’s Imperative to File Your Taxes

1. Receive a Refund

Most people get money back when they file their taxes. A tax return compensates you for being overtaxed throughout the year. All that extra money withheld from every paycheck adds up. In many cases, people receive hundreds or even thousands of dollars depending on their income. When you don’t file, you won’t receive anything. A tax consultant can ensure that you receive the maximum refund possible. 

2. Avoid Fines & Penalties

It’s illegal to not file your taxes. If you owe taxes, you can receive a fine of 5% on the amount owed for every month you don’t pay—or up to 25%. If you file 60 days after the deadline, a late fee of 100% or $205—whichever is less—on your unpaid taxes can be charged. Failing to file can also become a federal crime, especially when obvious evasion is detected. This can result in jail time. Avoid these fees by working with a tax consultant, as these professionals are well-versed in the legality of tax filings.

3. Qualify for Financial Assistance

Do you plan on purchasing a car, home, or a substantial asset? If you need to finance the purchase with a loan from the bank, it may be difficult to secure one if you haven’t filed your taxes. Banks see failure to file as delinquency, and will thus be less willing to issue a loan. They also won’t have proof of previous income. Normally, they’d use this to determine a loan amount and interest rate.

If you have trouble filing your taxes, work with a tax consultant. Dianne M. Saunders, CPA, of Litchfield, CT, has assisted clients for 25 years with tax filing, small business accounting, and payroll services. She has extensive accounting experience and will create an effective management plan to ensure you and your business achieve all your financial goals. Call (860) 567-3022 to schedule a consultation and visit her website to learn more.