It’s Tax Season, and that means that many Americans are preparing their tax returns this year to learn that they owe the IRS money. In a similar situation? Here are a few recommendations we have if you owe money to the IRS on last year’s taxes:
- No matter what you can or cannot pay toward your balances owed, be sure to timely file your tax return. Taxpayers with a filing requirement have a legal obligation to file tax returns accurately, completely, and on time. In addition to the legal obligation to file (making not filing a crime), failure to file taxes timely also comes with a late filing penalty of 5.0% of the unpaid taxes for each month that a tax return is late (not to exceed 25%). Need a little more time to gather your information/prepare a complete and accurate tax return? Request an Extension of Time to File Your Tax Return before the due date. REMEMBER: an extension gives Taxpayers more time to file the return, but it does NOT give Taxpayers any additional time to pay the taxes due.
- If you can pay the balance without incurring more tax liabilities and/or a financial hardship, pay the tax by the deadline. This will help to avoid interest and penalties. If you were obligated to pay your taxes through Estimated Tax Payments last year, you may still receive an Underpayment of Estimated Tax Penalty.
- If you are unable to pay the balance, be proactive. It’s time to start evaluating options such as Installment Agreements, Offers in Compromise, Penalty Abatements, and more. Penalties and interest will continue to accrue until the balance is $0, and the IRS can file Notices of Federal Tax Liens, garnish wages, and levy bank accounts if tax balances go unpaid for too long. Bryson Law Firm, LLC is here to help.
Unsure what to do now that you know you owe back taxes? Contact our office today to schedule a free, initial consultation with one of our Attorneys to discuss next steps.