Why do we file taxes

They are facing massive labor shortages due to the lates t C OVID strain, Omicron, on top of playing catch-up after getting behind schedule in Those steps are as follows:.

You may file as early as January 24 and the experts advise that you do so. The IRS is anticipating a difficult year of processing returns due to several issues that have arisen over the past couple of years. Hence it makes sense to comply with the income tax regulations and file your returns correctly. In order to calculate your tax liability and file accurate returns, it is essential that you keep all the documents from which data is required handy.

The documents required include. The tax payer is not required to submit any documents at the time of filing returns. Thanks for writing in. Under the Income Tax Act, non-filing of returns can attract a penalty of Rs 5, Apart from the basic advantage of avoiding legal implications arising from tax evasion, filing your ITR is a way of having a legitimate proof of your income.

More importantly, filing your ITR every year helps you create a financial record with the Tax Department. Hope this will help! Your email address will not be published. Photo credits : Alan Cleaver. Interest certificates, TDS certificates, loan repayment statements, and other forms are included in the documentation. You must get all these forms and documents ready before time.

If you start your income tax preparation early, you would have ample time to request these documents from the bank or other appropriate sources. This must be compelling enough for you to start preparing now itself for the next financial year. Rooting out errors can become easy and convenient if you file your tax returns on time.

You would get ample time to rectify your mistakes. The haste in the deadlines can lead you to forget to include certain sources of income. You might even miss claiming a deduction. You ought to start early to avoid unnecessary errors and delays in processing. If you hire a tax return accountant, they would recommend you to get your documents and paper ready before it is too late to file the returns.

If you manage to avoid late payment, there are chances of you preventing to pay the penalty. A belated return tends to attract a penalty, and that too quite heavy to be paid. The best thing you can do to avoid that is by paying the taxes on time. When you hire a professional tax return accountant, it is evident that they are skilled enough to have a keen eye on every intricate detail regarding the tax filing process. But, when you delay filing taxes and let it lurk to the last days, there are chances that the accountants miss on one thing or another.

The rush and the haste can make tax filing a confusing and very perplexing process. It is recommended that you hire a TRP and avail his services early on. There are chances that the chartered accountants are booked nearer to the due date. The income tax ended up being repealed in The 16 th Amendment, which was passed in and ratified in , reintroduced the income tax. Since , income taxes on individuals have been the largest source of revenue for the federal government.

While individual income tax is the big one, there are other types of taxes you may or may not be aware of, including:. Every year you file your income tax return. For assistance filing your taxes, you can turn to TaxAct. Service hours limited to designated scheduling times and by expert availability.