What Should be Done About Back Taxes?
- Author Eric Niehaus
- Published June 24, 2012
- Word count 367
If a person is not 100% sure how much they owes the Internal revenue service, then it would be a smart idea to consult a professional accountant. An accountant can help a person evaluate how much money is owed and give an individual good guidance on how to deal with future tax returns. Once an individual has determined how much money needs to be paid in back taxes, they may formulate a plan for paying off the back tax bill in full.
There is more than you way to back a back tax bill. The Internal revenue service has back tax papers on their official website that must be filled out with the tax payment and sent in. The perfect option would be to pay the back tax bill in one shot, as that way one will not accumulate late payment fees and enlarged interest rates. Unfortunately, this is not an alternative for many people and while a person may take out a loan to pay back taxes, this may not be the best course of action.
A person who cannot pay the back tax bill immediately should contact the IRS and work out either an installment agreement or compromise agreement. If the Internal revenue service agrees to an installment agreement, then one might be able to pay back a small portion of the money due every month. However, a person who works out this type of agreement with the Internal revenue service might need to make sure to pay the whole amount due on time, as there can be negative consequences for not doing so.
A compromise agreement is much more difficult to figure out than an installment agreement. In a compromise agreement, the Internal revenue service agrees to give up some of the money it is owed and a person only has to pay a portion of their back taxes. This agreement is a "last resort" if you has no hopes of ever repaying the back tax bill. In addition, the Internal revenue service will only consider a compromise agreement if an individual is looking at harsh financial hardships and/or it is not apparent just how much a person has to pay in back taxes.
It is significant to pay back any back taxes owed quickly. The truth is that it is best to file a yearly tax return and double check it for precision so that back tax bills do not come up. However, people who have made a mistake with their yearly tax bill might look into the problem without going through severe IRS action. The first step would be to consult a CPA and then contact the IRS as to which repayment alternative would be the most appropriate.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- 10 essential tax-saving strategies for landlords: Maximise your rental income
- A Comprehensive Guide to Navigating the Process and the Role of Customs Brokers in the UK
- Outsourced Accounting Services for UK Businesses: A Cost-Effective Solution for Financial Management
- Top 8 Self Assessment tax return software
- How to Close a Limited Company in the UK
- Maximizing Your Finances: Unleashing the Power of CPA Services
- VAT penalties – New rules
- TAX-FREE STRATEGIES IN AN UNCERTAIN ECONOMY
- 2022 Energy crisis and failure to connect Reality.
- When Are Corporate and Personal Taxes Due in Canada in 2021?
- You Would Never Have Thought That Having Accounting Internship Could Be So Beneficial
- ACTIVATION OF UAN
- Focal motivations behind getting a Tax direct for Small Business Firms
- Avoiding the flood — tax issues with water rights in agribusiness
- Social security benefits for a family (COVID-19)
- How to use QuickBooks Component Repair Tool?
- Do you want to reduce your taxes for next year?
- Will you be responsible with your tax refund?
- Getting started with QuickBooks Enhanced Payroll in Brief
- Are DSTs Right For Your 1031 Exchange
- Tax Return Makeovers By Kenya Woodard
- Why have all crypto tax attempts failed?
- Are You a Corporation? Know Why Consulting a Tax Accountant Is Vital
- Share capital or share premium for your Dutch company?
- Everything investors should know about 1031 sponsors
- Why is the income tax so high in UK?
- Should I do my own tax return?
- Get More Money Back on Your Tax Return with help from the Tax Cuts and Jobs Act
- Don’t Fall Victim to these 3 Tax Scams in 2018
- Find Out If 72(T) Penalty Free Income Is a Solution for You