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Tax return filing is truly vital. However, to file a return, one must have knowledge of whether they need to file or not. There is no direct answer to this question. The answer would entirely depend on the amount of income you earn annually. If you are earning a certain limit, then you may be required to pay tax. If your income falls below the threshold level, then you may be exempted from filing a tax return. Here is an example that would help an individual with understanding the concept. In the year 2009, if a person was earning equal to 400 dollars or above by self-employment, then the individual is eligible to file a tax return. The figure or threshold limit of income is different for those who are employees. They are subject to change every year.
Why to File a Tax Return?
It is indeed crucial to know the reasons why filing a return is essential.
First and foremost the reason is that one would be liable to pay penalty or interest if they fail to file a tax return. There may be some other legal actions taken.
States operate differently however they also take strong action which may be in form of penalty etc.
It is not advisable to ignore the unfiled tax returns. One should file tax on timely basis.
Ways to File if Late
This is not really difficult to task. One needs to be truly proactive while dealing with tax returns. In order to avoid any penalties on your tax return, one must pay their tax return as quickly as possible. If you receive any response letter regarding the unfiled tax, then you must immediately opt to file the tax return. You must avoid responding to this letter by signing and returning it. Generally, any letter would be sent to the last updated address with the tax authorities.
There could be exemption to penalty or interest considered if you have strong justification for delay. If you are in position to explain why this situation arrived, and why you were unable to file your tax return, then you may could be freed from any penalty or interest. This will only happen if authorities think that the cause if reasonable enough.
Techniques to File Tax Returns
Tax codes are complicated and grow longer with time. Hence, it is difficult to file taxes easily. One surely does not want to waste too much time in dealing with filing. There has to be an easier way. Technology has advanced to a great extent, and nowadays, software for tax filing is readily available. This software is simple to operate and makes the complex filing procedure more convenient. It takes fewer steps when one uses tax software to file their taxes. Today, things are much more simple and easily available due to online technology.
Conclusion and Consequences
It is always good to file tax returns on time. However, if there is any kind of delay due to unusual circumstances, then it should be filed as soon as those issues are clarified. Increasing debts by allowing penalties and interest on the unfiled return is not healthy to your financial situation. One must take every care to avoid being in such situations. If an individual has discovered that filing a tax return is applicable, then file it without any delay.