Filing a tax return is a yearly activity that is undertaken as a moral and social obligation by every citizen of the country. Whether it’s a business or an individual, everyone is liable to file returns because these are the means for the government to define the amount and plan the expenditures of it’s citizens. It also offers a stage for the filer to claim refunds and other forms of relief from taxation as they become eligible for it. A specific amount or percentage of your income has to be paid as taxes and failing to do so can result in penalties and other severe repercussions.
Legal and Social Implications of Filing a Tax Return
There is generally a fixed date at the end of each financial year to file tax returns. Although, for cases that need to be audited before filing, the date may be a little later. When you file the returns, you basically define a legal sanction for your income to be used, however and wherever. Similarly, inability to pay taxes on time can result in legal action against you, depending on the amount that is due. However, generally, the repercussions of late payments are related to higher interest rates and penalties.
In addition, it is your social duty as a citizen to file a tax return. Because you use facilities provided by the government every day such as roads, public transport, parks and others, which require regular maintenance, it is in your own interest to pay tax bills on time. Complying with your social duties makes you a responsible citizen of the country and, with time, your social status improves.
Loans and Registrations
When you apply for a home, education, or any other type of loan, it is mandatory to show your returns to the lending institution, as it is their standard operating procedure. We all require loans from time to time, whether for business or individual purposes, so maintaining a good tax history can ensure that you are approved every time you are in need. Also, ensure filing a tax return before your VISA processing, as there might be certain travel restrictions imposed by the government on people who have not filed their returns.
Registration of your immovable assets, in certain states, requires you to show tax returns and, without it, the specific property or asset cannot be registered in your name. If you have filed your returns, the whole process can be a lot easier for you. Also, issuance of certain credit cards and the use of other bank facilities are banned for non-filers. Therefore, if you want to avail these benefits, file as soon as possible.
Filing a Tax Return for Government Tenders
For someone who has a business that involves dealing with government institutes and also some private corporations, tax returns must be filed. In some cases, you may have to show the receipts for the past 5 years because they like to ensure that they are dealing with an individual or business who has a good track record. However, this is not a hard and fast rule and, in some cases, you may get the tender without showing the returns. Therefore, it actually depends on the institution that you are dealing with.
Faster Refunds
Refunds in taxation work on a first come, first serve basis. The earlier you file your return, the sooner you will get your refund. When you are filing a tax return, you basically disclose everything that you have earned in that financial year. The IRS reviews your returns and, individuals who filed earlier, are eligible for the reimbursements quicker than others. Filing early also ensures that, if you had made a mistake, you have enough time to review it and correct the errors.
Therefore, there are numerous benefits of filing a tax return in time and, as a responsible citizen of your country, it is your moral obligation to ensure that you do so.
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