If money were no object, would you rather pay your taxes in full or via an installment agreement? I don’t know about you, but I would rather get it over with and pay everything up front if I could. While this may not be possible for everyone, you ought to realize that you can actually save money if you pay your taxes in full.
That is probably common sense – you don’t need me to tell you that you will save money if you pay everything in one go (much like with other purchases that you make). Do you know exactly why/how you can save money by paying your taxes in full, though? Take a look at these convincing facts.
Personal exemptions and deductions
These exemptions and deductions vary from one individual to another. Some people may not qualify for them, while others may have more exemptions. The common denominator is that these “perks” can be claimed only if you file your return.
Penalties and charges
Deadlines exist for a reason, and if you miss the deadline for filing your tax return, you will most certainly have to pay surcharges. You may not realize it, but filing late can cost you as much as 25 percent more!
Here’s another thing – even if you pay via an installment agreement, applicable penalties and charges are not always frozen. In short, you’ll still be paying more than you ought to if you had only paid in full.
Social Security Benefits
In some cases, self-employed individuals may lose out on some benefits from the Social Security Administration. In calculating social security benefits, the Administration depends on the documents that you file. If you do not file in full, you might not get all the benefits due you.
As much as possible, pay your taxes in full and avoid installment agreements.
Photo credit: ericskiff
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