While we all want to keep as much of our own money as we can, deferring
taxes is a costly mistake. The cost of deferring payment is explored by Eva Rosenberg on the Equifax Personal Finance Blog in the article, “
Filing Taxes: Pitfalls of Procrastination.” The article is half tax tips and half horror stories of people suffering avoidable penalties when they could have easily prepared and scheduled time with a professional in the nine months of tax return filing season.
There is certainly a danger in the false sense of security you can get from always thinking you can get an extension. As time passes along, it is harder to recover your numbers from the previous year and often things get misplaced and then the extended filing date, usually October 15, sneaks up on you. If you miss that date, the penalties start adding up. One of the examples has a lazy tax filer faced with late-filing penalties as high as 25 percent for not getting around to digging up a single piece of information.
If you are paid on W-2s where the correct amount of withholding is removed, you should still be sure to file. Not only will this make sure you aren’t sent a bill by the
IRS, but by filing you also ensure you get your full refund. This is especially important to keep in mind because the IRS keeps your refund if you allow it to sit unclaimed for three years.
There are other horror stories about being lazy when it comes to taxes and how to avoid them in the full article on the
Equifax Personal Finance Blog. The blog also has tons of useful information when it comes to your money, from taxes to insurance and beyond.