When it comes to stressful life events, owing money to the IRS ranks up there as one of the most stressful. "Death and taxes," as they say, are inevitable. You can't avoid filing them or paying them, and you certainly want to come to tax resolution as soon as possible once you discover you are in debt to the IRS. Here are ten tips to avoid being in the line of fire with the IRS.
Once the IRS determines there is a problem, you can't avoid or ignore the situation and need to come to a tax resolution as soon as possible before the taxes, penalties and interest you owe spiral out of control. Immediately open all correspondence you receive from the IRS -- ignoring their correspondence will not make the problem to away. One way to avoid IRS tax problems is to make certain you are properly filing your taxes and are keeping track of all income so that you're filing correctly. With independent contractor status, it can sometimes be hard to track your 1099 forms but you need to make certain you have them when April rolls around to properly file your taxes.
File your taxes on time. We cannot stress enough the importance of this tip. It may be tempting to "forget" to file your taxes because you owe money, but again, ignoring the IRS will not make the problem go away. If you find you're going to owe taxes to the IRS you need to at least make a goodwill payment when you file your taxes and then immediately work with the IRS to work out a payment plan for the remainder. Remember, even if you file an extension, you will still be required to make a payment when you file the extension. An extension doesn't mean you don't have to pay -- you do. Talking to the IRS immediately and working out an payment arrangement is the best course of action. Once the IRS has offered you a payment plan, make certain you don't default. If you do, the IRS can demand immediate payment of the whole amount due.
Double check your tax bill from the IRS - they have been known to make mistakes. Make certain the IRS isn't asking for money you don't necessarily owe. Save money in anticipation of your upcoming tax bill. Check with an accountant at least quarterly to see if he or she feels you will be in danger of owing tax money when you file, if so, then start saving up for it.
Don't try to go it alone. When it comes to reaching a tax resolution and filing your taxes, admit that it is confusing and ask for help. Taxes are a daunting task even for seasoned professionals. The peace of mind you will attain from asking for tax help more than makes up for the check you write for that help. If, after all of that, you find you still owe more than you have access to, ask the IRS for help. Ask immediately and work out a payment plan. Keep in mind that you're not alone - it is easy to run into tax issues with the IRS, many people do at one time or another. You can find information on the internet to help you address your issues, you can talk to your accountant or a tax professional, but the bottom line is, the problem won't go away so address it as soon as you can.
Once the IRS determines there is a problem, you can't avoid or ignore the situation and need to come to a tax resolution as soon as possible before the taxes, penalties and interest you owe spiral out of control. Immediately open all correspondence you receive from the IRS -- ignoring their correspondence will not make the problem to away. One way to avoid IRS tax problems is to make certain you are properly filing your taxes and are keeping track of all income so that you're filing correctly. With independent contractor status, it can sometimes be hard to track your 1099 forms but you need to make certain you have them when April rolls around to properly file your taxes.
File your taxes on time. We cannot stress enough the importance of this tip. It may be tempting to "forget" to file your taxes because you owe money, but again, ignoring the IRS will not make the problem go away. If you find you're going to owe taxes to the IRS you need to at least make a goodwill payment when you file your taxes and then immediately work with the IRS to work out a payment plan for the remainder. Remember, even if you file an extension, you will still be required to make a payment when you file the extension. An extension doesn't mean you don't have to pay -- you do. Talking to the IRS immediately and working out an payment arrangement is the best course of action. Once the IRS has offered you a payment plan, make certain you don't default. If you do, the IRS can demand immediate payment of the whole amount due.
Double check your tax bill from the IRS - they have been known to make mistakes. Make certain the IRS isn't asking for money you don't necessarily owe. Save money in anticipation of your upcoming tax bill. Check with an accountant at least quarterly to see if he or she feels you will be in danger of owing tax money when you file, if so, then start saving up for it.
Don't try to go it alone. When it comes to reaching a tax resolution and filing your taxes, admit that it is confusing and ask for help. Taxes are a daunting task even for seasoned professionals. The peace of mind you will attain from asking for tax help more than makes up for the check you write for that help. If, after all of that, you find you still owe more than you have access to, ask the IRS for help. Ask immediately and work out a payment plan. Keep in mind that you're not alone - it is easy to run into tax issues with the IRS, many people do at one time or another. You can find information on the internet to help you address your issues, you can talk to your accountant or a tax professional, but the bottom line is, the problem won't go away so address it as soon as you can.
About the Author:
Seeking tax relief from the IRS? Contact Guardian Tax Resolutions. The Guardian will help you resolve your tax issues and get you the piece of mind that you deserve.