Do you have back taxes owed from previous years? Back taxes are any taxes that were not paid in the year they were due. This is not uncommon, especially when you realize you do not have the funds available to cover your tax debt after filing your return. You are not alone and there are ways to get help with back taxes.
What If I Don’t Pay?
First, let’s talk about the consequences of not paying your taxes. Filing your taxes and not paying will result in a failure-to-pay penalty. Generally, this penalty is ½ of 1% of your unpaid taxes each month, and the penalty will continue to accumulate over-time, growing larger. You should pay as much of the debt as possible so the penalty is applied to a smaller debt amount. It is also possible that the IRS could impose a levy to regain what you owe, which is another reason why it is important to resolve the back taxes quickly.
Okay – But What Can I Do?
There are multiple ways to help with back taxes offered by the IRS that may be available to you. Payment plan arrangements may be an option, or there may be ways (such as an Offer in Compromise) to lower the amount you will have to pay to cover the debt. Contact your local IRS office for the appropriate forms to file to arrange for a payment plan or other arrangements.
Obviously, the best way to avoid back taxes in the future would be to pay your taxes owed on time; although, it is understandable that this may not always be an option. Consider getting help with back taxes from an experienced tax expert to ensure you resolve these issues as quickly and efficiently as possible. Nationwide Tax Solutions can help with a free tax consultation, using over 24 years of experience.