David M. Daggett CPA - Why It's Important to File Tax Returns

David M. Daggett has worked as a CPA for more than 30 years, during which he's become very knowledgeable about tax matters. As he's seen during his career, there are a lot of people who choose to procrastinate on issues like filing taxes. With a deadline fast approaching, it's not uncommon to see people rushing to get their documentation in order, crunch the numbers and get their tax returns filed in time to avoid penalties.

Costly penalties

Considering the importance of taxes, it's fair to expect that there will be some penalties levied to people who fail to file their taxes. If you are expecting a tax refund, chances are you may not get the same level of reproach from the authorities as someone who owes the government money.
Penalties for late filing take effect immediately after the deadline, and can start from 5 percent of unpaid taxes owed for every month delayed, up to 25 percent in serious cases.

Delayed refunds

Waiting beyond the deadline to file taxes can result in not only late-filing penalties but also a delay in getting tax refunds. By failing to file on time, you are giving the government an "interest-free loan," - money that you can save or spend for other useful reasons.

More than just warning letters

In the event you fail to heed the government's call to file tax returns, the consequences can be more severe than warning letters. Ignoring any to meet your tax bill can resort in wage garnishments, asset seizures and even arrest for tax evasion.

For the majority of the people who file on time, the stress of meeting the deadline is pacified by the thought of receiving income tax refunds. A refund means you get money back from the government, which can be a good infusion of cash into your pocket. Whether it's $1,000 or $2,500, this chunk of change can come in handy.

David M. Daggett, CPA is currently a partner at Lee, Cochran & Daggett, CPAs, LLP.

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