How Full Payment of Taxes Saves You Money
Take action now, or you may face additional interest and penalties. Paying your taxes in full will cost you the least amount of money and here's why:
- You may be entitled to personal exemptions, deductions, and credits that can lower your tax. But you can only claim these if you filed a return.
- Failure to file a return or filing late can be costly. If taxes are owed, a delay in filing may result in penalty and interest charges that could increase your tax bill by 25 percent or more.
- You may be entitled to a refund. However, to get your refund, you must file a tax return within three years of the original due date of the return, or two years from the time you paid your tax.
- Taxpayers who are entitled to the Earned Income Tax Credit must file a return to claim the credit even if they are not otherwise required to file. The return must be filed within 3 years of the due date in order to receive the credit.
- You stand to lose social security benefits on income from self-employment. The Social Security Administration relies on information from your filed tax return to calculate social security benefits. For your income to be reported to the Social Security Administration, you must file a tax return.
- Copies of filed tax returns must be submitted to financial institutions, mortgage lenders/brokers, etc. whenever you want to buy or refinance a home, get a loan for a business, or apply for federal aid for higher education.
Other Ways to Resolve Tax Debt
Taxpayers unable to pay all taxes due on the bill are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be lessened. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an Installment Agreement, temporary delay, or Offer in Compromise.
- Filing Late and/or Paying Late
- Frequently Asked Questions For Past Due Return Filers
- Getting Free Help