The tax experts at Akounto Inc. have researched that the searches for “late tax penalty” in the United States have exploded by 615% in the last two days as millennials express anxiety over the potential penalties they may face for failing to make timely tax payments.
Analysis of Google Trends data, discovered by the Akounto Inc. team which offers a small business accounting software, states that this is a cause for concern, particularly for millennials who are already struggling to save for retirement.
As per the CNBC, a staggering 66% of working millennials have nothing saved for retirement and those who do have an average retirement savings, have a balance of only $23,000 (£18,465). The impact of tax penalties on these already limited savings could be significant.
As per the tax experts from Akounto, “failing to file a tax return on time or not paying your taxes when they are due can result in hefty penalties and interest charges, which can impact your ability to save for retirement”.
The penalty for failing to file tax returns or pay taxes on time can be up to 5% per month, up to a maximum of 25% of the unpaid tax. This would mean that for millennials, who are already having a tough time saving for their retirement, such penalties could pose a real threat to their long-term financial security.
A tax advisor from Akounto Inc. also weighed in on the issue, saying: “In order to steer clear of potential penalties, it is crucial for millennials to proactively manage their tax obligations.
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“This entails keeping themselves informed about tax regulations and deadlines from time to time, submitting tax returns promptly and correctly, and settling tax dues on schedule.
“Consulting with financial advisors can also be advantageous in protecting retirement savings. It is imperative for millennials to take appropriate measures to shield their retirement savings from the consequences of tax penalties. By being proactive, they can establish a solid financial footing and guarantee that their retirement goals stay on course.”