Personal Finance

Fiscal Financials – Why Filing Your Taxes Is Essential

Every year around tax time countless souls in Australia prepare to file their taxes for the year. Almost like a game of chance, every working Australian reviews their income and hopes that their tax liability is less than their contribution. If filing taxes on your own, the stakes are higher when DIYers look for loopholes in the tax code in an attempt to alleviate tax pain. Taxes are a necessary evil in an ever-changing economy that mandates the government increasingly take care of its citizens. While many might view taxes as government intrusiveness, the money generated from the tax base supports an infrastructure that defines the governing body and country. Whether filing through any one of the countries certified tax accountants or doing it on your own, filing is important for many reasons. Let’s take a closer look at some of the reasons that make filing your taxes so important.

Contributing To The Tax Base

While skipping out on your tax bill might be tempting, filing your taxes is extremely important simply because the money that is generated, first and foremost, goes toward building infrastructure. Your highway system, road signs, and the maintenance of it are directly supported by funding generated through taxes. Public education, government buildings, and airports are funded in some part through taxes received from the public. In essence, this revenue is very important, and without this funding, travelling and educating the public would fall on the shoulders of individual municipalities.

Supporting Health Services

The taxes generated from the public also contribute to health services. Australia has a universal health care system, which is funded primarily through government revenue. While taxes might be a bit higher here than in other countries, Australians do not have to worry about private insurance premiums that might or might not cover certain pre-existing conditions, as they can get treatment from area clinics and hospitals through this system. Universal healthcare insures Australians get care regardless of their income.

Taking Out Loans

Another important reason to file your taxes is that when applying for loans on big-ticket items like a home or a car your tax records are proof of income. When seeking mortgage financing, many lenders will request a copy of the tax form for the past two years to show proof of income. Your tax return is proof that you have a consistent work record, which goes toward creditworthiness.

Avoiding Tax Penalties, Tax Liens And Imprisonment

Tax pain only increases when you fail to file. The added penalties that are racked up as a result of not filing your taxes is just more incentive to go ahead and pay your taxes. Depending on the country, the penalties can be severe, so filing is a better option to having to pay back taxes plus the penalties that go along with it.

Tax pain reaches epic proportions when the government essentially has frozen your accounts to take the money they believe is due. When taxpayers fail to file, they risk not only having their accounts frozen but their assets seized. Worst case scenario, tax evasion can land you in prison. Plus, the legal fees that go with battling the government in tax court can be just as imposing. When calculating the difference between not filing and filing, the debt of not filing is not worth the trouble.

Waste Or Husbandry?

Every citizen gripes about having to contribute to the tax base, especially when the revenue often seems to be spent poorly. However, even with the appearance of waste, the importance of filing your taxes can be seen in the state of the country’s infrastructure, education, and social programs.

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