Dec 28, 2020 11:28 AM EST
Reasons Why It's Important to Pay Taxes
For many people, taxes aren't something they need to worry about because it automatically gets taken off their pay. However, there are plenty of citizens that are freelance or self-employed and need to do it themselves. Not paying on time or not at all can lead to significant consequences.
It's possible to get a criminal charge for trying to pay fewer taxes. Something as simple as reporting lower income or higher deduction amounts are considered violations of the law. Ignoring these rules is considered tax evasion and shouldn't be confused with tax avoidance.
Tax avoidance is when loopholes in the law are used to decrease the amount of taxes you owe. Although this is technically legal, it's still frowned upon and can always be found through an audit.
If you're found guilty of tax evasion, it could result in a hefty fine and jail time. According to a recent post, revenue agencies pay more attention to businesses like employment agencies attempting to defraud the government, but everyone is still subject to audits.
Saving some money from not paying taxes is never worth the consequences. You'll end up paying more money than before, and a criminal record will have lasting effects on your life.
Late filing or tax payment often leads to several financial penalties. If there's a reason why you can't pay what's owed, it's best to notify the revenue office instead of ignoring the problem. You'll most likely be able to work out a payment plan through taxpayer relief provisions until you have a better income situation.
Generally, the penalty you'll pay is 5% of the outstanding fee and an additional 1% for every late month up to 12 months. If you're charged with late filing or payment within the last three years, the amount increases to 10% with an extra 2% for every unpaid month up to 20 months.
There are several benefits that people can receive every year. These can come in the form of returns or monthly payments. You can only claim the ones you qualify for when you file your taxes because they're not automatically awarded.
If you don't pay on time, these benefits are reduced or stopped until everything is up to date. Depending on the circumstances of non-payment, there may be a way to get back on track without losing any government returns. It's best to talk to your revenue agency about available options.
Take Taxes Seriously
Not paying or purposely avoiding your taxes is never worth it. You can quickly end up owing much more money because of the amount you pay in penalties. Even worse, there could be a chance of jail time and a criminal record.
If you qualify for the government's benefits, they might stop until you catch up on your overdue taxes. For most people, the best solution is to communicate with the revenue office to avoid penalties.
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