Filing Taxes When You Owe Money:

The tax-filing deadline will be here before you know it and pretty soon, you’ll be gathering up your receipts and plugging in numbers. I know you’re hoping for good news, and praying for a big refund in the process.

If all goes well you won’t owe anything and you might even be getting back a nice refund. But, what should you do if you owe money? If you know you owe money to the IRS, you might be tempted to not file a return, but that is the worst thing you can do!

If you fail to file on time, the IRS will come after you until you do. Worse yet, the tax agency can assess up to 25% just in late filing penalties. Plus, interest will start piling up right away. Instead of not filing, here are the steps you should take if you owe money to the IRS.

Seek Out Tax Deductions You Can Still Claim

If you find that you owe taxes, all might not be lost. As long as the April 15th tax-filing deadline has not yet passed, you can still add money to an IRA, lowering your taxable income in the process. As long as you meet the income guidelines for a deductible IRA, this step alone could lower the amount you owe or even entitle you to a refund.

Pay as Much as You Can As Soon as You Can

Speaking of paying up, it is important to pay as much as you can as soon as you can. Even if you file for an extension, the clock will still be ticking on any required payments, and the penalties and interest can add up pretty quickly.

If you know you owe money to the IRS, paying it off should be your number one priority. That might mean squeezing your dollars extra hard or trimming your budget to the bone, but it beats paying penalties and high interest to the IRS.

Seek Professional Tax Help and Guidance

Owing money to the IRS is no joke, and dealing with the situation is not something you should try to tackle on your own. If you know you owe money to the IRS and cannot pay the bill in full, it is important to seek professional help and guidance.

A tax resolution expert can guide you through the process, helping you prepare, submit and negotiate a payment plan that works for you and the IRS doesn’t get to manage your monthly cash flow. You also may qualify for an offer in compromise, which settles your case for less than the amount owed, but it’s important to act as quickly as possible – you do not want your tax situation to get worse.

Hopefully, you will find a reason to smile when you file your taxes this year. Hopefully, you will find that you are due a refund, and you can begin making plans for the money that will soon arrive in your bank account. If not, it is important to know what to do and which steps to take. If you owe money to the IRS, you need professional help and guidance, so call a tax relief expert right away to preserve your rights and your money.

Before you make a decision, let the team at Bailey Tax & Accounting, Inc. see if we can help. We negotiate with the IRS day-in and day-out. We can potentially settle your tax debt for a lot less than you owe. Call us today to find out. Our tax professionals navigate the IRS maze so you don’t have to. Contact us here for a no-obligation in depth consultation!

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