Most of the Americans living abroad are aware of the fact that failure to file the US tax returns in Singapore can impose legal trouble- or might not be able to claim the deductions that they owe. For those who earn income from any source, filing an income tax return becomes mandatory as well as a complicated task to overcome. However, as an entrepreneur or an employee, you are liable for reporting and paying the taxes to the government following the prescribed tax filing regulations.
The federal government has stated a specific for eligible taxpayers to file their income tax returns and pay any taxes they owe. However, by law, the IRS has the authority to assess penalties over the taxpayers who either fail to pay the US taxation in Singapore or pay the proposed taxes after the deadline.
Here are a few reasons why it is essential for US citizens to file their annual tax returns timely.
- Become easy to obtain a loan- When you applied for a loan, the lender will always wish to see income tax returns from prior years.
- Collecting a social security benefit- Your chances of seeking social security benefits are computed with earning records reported on your income tax return.
- Refunds- Most of the eligible candidates are eligible to pay American tax in Singapore withheld by their employer. If you do not file your return within the time, i.e. three years, you may even lose the refund.
For those who do owe taxes as a US expat in Singapore, failing to file or filing an inappropriate tax return can lead to an IRS tax audit or tax litigation. In any of the case, the IRS has the authority to take the following actions if you fail to pay the tax return before the due date:
- The IRS will Issue an estimated Notice of Assessment (NOA) directed you to pay the owed tax within one month.
- Offer to compound the offense with a composition amount of a certain limit.
- Or summon you to court.
If you do not pay your taxes by the tax deadline, you will face a failure-to-pay penalty of ½ of 1 percent of your overall due tax amount.
Always keep in mind that failure to file a penalty is more than the failure to pay a penalty. You should file your return on time. Moreover, if you want, then you can reduce the additional interests and penalties by paying as much as you can with your tax return. To avoid hefty fines or imprisonment, it is vital to hire US expat tax services in Singapore to file your taxes within the deadline.
