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.