Top 7 Reasons to File Your Income Tax Returns on Time

Here are seven reasons for not being late filing your income tax returns.

1. Avoid Late Filing Penalties:
   
   
   Late filing can result in substantial and continuing
   penalties. This is in addition to any interest that is
   due.
   
   
2. Receive Better Service from Your Accountant:
   
   
   The earlier you get your paperwork to your accountant,
   the sooner he can start preparing your tax returns. More
   importantly, there will be more opportunities to explore
   and implement tax saving strategies. On the other hand, if
   you file late, you tie your accountant's hands. For example,
   he may hesitate to retain profit in your corporation if
   such profit will be subject to substantial penalties.
   
   
3. Avoid Criminal Charges:
   
   
   Of course, if you don't file tax returns at all for a few
   years, you may also face charges of tax evasion.
   
   
4. Prevent Bankruptcy:
   
   
   Generally speaking, persons who don't file tax returns on
   a timely basis also lack adequate records for managing
   their business. Since they don't keep their bookkeeping
   and accounting up-to-date, they only think they know how
   they're doing and how they stand financially. This, of
   course, is a recipe for financial disaster.
   
   
5. Enjoy Better Relations with Tax Authorities:
   
   
   Late filers also receive the unwanted attention of the
   taxation departments. Non-compliance can result in audits,
   aggressive collection action and legal proceedings. In
   addition, if you ever do have extenuating circumstances
   that might call for some leniency or extraordinary
   consideration on the part of the tax department, you are
   more likely to receive it if you have a flawless history
   of co-operation and compliance.
   
   
6. Obtain Financing:
   
   
   You'll have difficulty obtaining financing if you can't
   provide your financial institution with current income
   information. Assessment Notices from taxation authorities
   give banks more assurance that the income claims you make
   are true. As well, if you haven't filed your current income
   tax returns, what hidden tax liabilities exist? What is the
   state of your record-keeping? How do you run your business
   without adequate financial information? Your bank may
   hesitate to loan you money or refinance under these
   circumstances.
   
   
7. Reduce Stress and Worry:
   
   
   Many people who are late filing their taxs returns feel
   guilty about it. At the back of their minds, they worry
   about taxation authorities contacting them, audits, asset
   seizures, criminal prosecution, penalties and interest, and
   so on. Some of these worries can become magnified beyond
   what the actual situation warrants. Save yourself
   unnecessary stress by filing your income tax returns
   on time.

RESOURCE BOX:


J. Stephen Pope, President of Pope Consulting Inc.,
has been helping clients to earn maximum business profits
for over twenty-five years.

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