States scraping for additional tax revenue from non-filers

As an example, effective Jan. 1, 2010, Indiana will allow for a penalty of $10 per day (to a maximum of $500) to be assessed on taxpayers that fail to file an annual individual income-tax return — even if they do not owe tax or are due a refund. Indiana has required taxpayers to file an individual income tax return under these circumstances for decades. However, the possibility of a penalty being assessed is new.

The State says the penalty will not be automatically assessed on taxpayers who have acted on their own to file voluntarily after the annual filing deadline. However, if the Department identifies a non-filer through its own cross-checks and other discovery methods, a penalty will be assessed.

The time is now to strategically plan to stop wasting money on taxes you are not required to pay. Most changes need to be in place by December 31 to reduce your current year taxes, and sooner implementation results in greater savings, so act now!