Monday, June 19, 2017

Where There's A Bill, There's A Way! Completing Your Tax Return

tax return done
It’s one of the most stressful things you can do in your life, your tax return, it’s a mountain of paperwork and complicated figures, and once you have done it, you feel better than having conquered Everest without any oxygen, exhausted, great, and slightly out of breath! But what happens when you finish the return, and you discover, much to your horror, that you owe tax to the IRS, and not just that, but it’s tax you can't afford to pay? It can be somewhat stressful, especially if you're concerned about getting a criminal record! However, there are ways around the issue, which mainly consists of staying on the good side of the IRS!

Double Check Your Tax Return

This should be your first port of call because you could have added the same income twice by accident, or you forgot to make a deduction. Because, if you thought that you had qualified for a deduction, you need to be sure that you had answered the questions correctly. And if your tax return details are exactly the same as the previous tax year, it could be an issue with the IRS, and not you! In which case, call them to get some clarity on what the problem might be.

Reducing The Amount Of Penalties And Interest

If you owe a huge amount, penalties and interest can bump up that final cost even more! If you hire the help of a tax attorney who has experience with the IRS, it will make the process much less stressful! At least when you’ve got someone on your side who has years of experience in these issues, the problem can get resolved quickly and with few casualties. You can also aim to reduce your penalties by any of these:

Exceptions to underpayment – so, if you underpaid this year, but you owed less money last tax year, you don’t have to pay any penalty.

Ask them for an abatement - write a letter to the IRS. Make sure to explain your financial situation in depth and make the most what might have caused an issue in the past, such as a mitigating circumstance like a long illness, and specifically ask for “an abatement.” If your case is strong enough, they may waive the penalties. 

Pay the outstanding tax soon as possible- either filing early or being able to pay as much as possible shows that you are keen to get this issue sorted.

Ask To Pay The Balance In Installments

You can set up a payment plan through Filing Form 9465, known as the Installment Agreement Request. Setting up a payment plan will allow you some time, and if you can show you're unable to pay the full amount, the IRS must let you make the payments in three years or under, but this is if you owe $25,000 or less. Follow these ideas, and you will be sure to stay on the right side of the IRS! It can be stressful, but where there’s a bill, there’s a way!

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