By filing a tax return, taxpayers may be able to claim personal exemptions, deductions and credits that can lower their taxes. If a return is filed late or not at all, however, it can be rather expensive. If an individual owes taxes and is late returning them, they may be charged with interest rates that could raise the tax bill by 25 percent or higher.
By filing tax returns either within three years of the original due date of the return, or two years from the time the taxes were paid, the taxpayer may also qualify for a refund.
Citizens who receive the Earned Income Tax Credit have to file a return to claim the credit, even if they usually do not do so. The return must be filed within three years of the due date to get the credit. To reduce tax liability, consumers should claim credits or deductions as well.
Taxpayers can lose Social Security benefits on income from self-employment if they fail to file their tax return. The Social Security Administration depends on information for filed tax returns to determine Social Security benefits. Consumers can visit a tax preparer to make sure they are filing correctly and receiving the maximum tax benefits.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.