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Can't Pay Your Taxes? Why You Should File Anyway

Taxes can be a real hardship for taxpayers, and many Americans won't be able to afford their tax payments this year. But that doesn't mean you shouldn't file a tax return, as you could get yourself into real trouble.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, explains why filing a return is your smartest move even if you can't afford to pay your tax bill. Dan notes that penalties for failing to file a tax return are much more draconian than penalties for failing to pay the tax you owe, with 10 times the penalty amount if you don't file. Moreover, Dan notes that payment arrangements are often available from the IRS if you're upfront about your need. Dan concludes that with all the paperwork verifying your income, trying to get away without filing almost never works, making it much smarter to fess up and save yourself a boatload of penalty liability.

Be smart about your taxes for 2014
Minimizing penalties is just one way you can cut your tax bill to Uncle Sam. In our brand-new special report "How You Can Fight Back Against Higher Taxes," The Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here to get your copy today -- it's absolutely free. 


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  • Report this Comment On January 26, 2014, at 10:44 PM, JohnSmith wrote:

    Agree...like it or not, if you receive a stub in the mail, the IRS received that SAME STUB. They have your data, and unless you plan to permanently leave the country, you will be found by them. After all, they have the NSA to help them.

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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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