Income Tax or “Stupid Tax”

Look around anywhere and you can certainly get the feeling that the tax season is here again as it always does every year.

If you wake me up from sleep and demand to know about taxes from me, i will ask you “which one – Income or Stupid?”. Understanding taxation requires more than a genius mind that even Albert Einstein  rightly said “The hardest thing in the world to understand is the income tax” and as i am not a tax expert – don’t ask me too much about Income tax. But if it is Stupid Tax then i might be able help you.

A “Stupid Tax”  is the money you waste fixing stupid mistakes – that is according to Dave Ramsey the radio show financial counsellor. We have all paid this “tax” one time or the other. My aim for the next few days  is to highlight some of the most common  “stupid taxes” so you don’t have to pay them. A Morgan Stanley advertisement says “You must pay taxes.  But there’s no law that says you gotta leave a tip.”

1. Not Filing A Tax Return Because You Don’t Have The Money To Pay Your Taxes Now.
   Whether you have the money to pay the taxes  or not, always file your tax returns. The Inland Revenue considers not paying on time and not filing as two separate issues, and a penalty is involved for each. After you have filed your tax return, you have several options. You can make part-payments or make monthly payments through the installment agreement or temporarily delay paying. Whichever is best for you, contact the Inland Revenue right away to let them know you cannot pay now. You should pay as much as you can when you file though, because the Inland Revenue assesses penalties and interest on the amount not paid.
2. Ignoring The Notification Letters From The Taxman.
   Do not ignore letters from the Taxman. If you owe taxes, they  will collect. The Comedian Chris Rock said “You don’t pay taxes – they TAKE taxes.” People who do not communicate with the Taxman about their inability to pay can expect a levy, which is a legal seizure of property to satisfy a tax debt, is another legal means the Taxman can use to collect taxes. This means the Inland Revenue can seize your car, boat or home and sell it to satisfy your tax debt or it can place. Tax laws vary from country to country – check the laws for yours.

If have made the mistakes above as i have done before, please don’t let them repeat themselves; if you haven’t, avoid them at all costs.

Related posts:

1. Stupid Tax #3 – Paying Your Tax With High-Interest Credit Card.
2. Missing the January 31 Tax Deadline Carries Penalties! Act Fast!!
3. ‘Sin’ Tax Avoidance Made Easy
4. Stupid Tax #4 – Get A ‘Refund-Anticipation’ Loan!
5. Tithe – on Gross or on Net Income
6. A New Source of Income Can Help Your Financial Freedom