If you have been wondering “How much do I owe the IRS?” it may be a matter of a simple calculation using an IRS form, or it may require the services of a professional tax company. The IRS tax code is complicated and changes each year can make determining your tax obligations difficult. US Tax Relief is a three-tiered tax service, offering tax resolution, tax preparation and bookkeeping services all under one roof. Our tax team has the expertise and experience to work with you to determine what you owe.
What Should I Do If I Think I Owe the IRS Money?
Many taxpayers who owe back taxes wonder how much they owe to the federal government, because of interest and penalties that begin to accrue when they have not paid or filed. Others may owe more because of a new life circumstance like marriage, deaths, new jobs, divorce or inheritances. There are a variety of life events that can affect your tax liability.
The first task is to make sure you truly owe the IRS the money. Read your completed return and look for any errors you may have inadvertently made, whether it be that you forgot to add a deduction, or you added the same income twice. If you expected to receive a credit or qualify for a deduction and you didn’t, be sure that you answer all your questions correctly.
You can also contact the IRS on the phone or do so in person through a local IRS office. You’ll need to have your Social Security number and personal information with you. You can then ask whether there’s an IRS tax balance owed on your tax account for any previous filing periods. The representative should be able to tell you whether you have an outstanding balance and will be able to tell you how many different assessments you may owe. Many taxpayers are uncomfortable contacting the IRS or have no idea where to start when it comes to settling their tax debt. US Tax Relief can handle all interactions with the government agency and help you prepare tax returns for both the current year and any previous year in which you didn’t file. Contact us today to begin the process.
The Cardinal Rule: Always File Your Taxes
The most important thing to do as a taxpayer, whether you can afford your tax liability or not, is to file your taxes on time. Even if you know you won’t be able to pay it off immediately, simply filing will save you hundreds and even thousands of dollars by minimizing tax penalties. There are failure-to-file penalties and failure-to-pay penalties that become more severe as time goes on, so this is an essential first step in the process of relieving your tax debt.
In general failure-to-file penalties are steeper than failure-to-pay penalties. A failure-to-file penalty is usually set at 5 percent of your tax debt for each month they go unpaid, but this penalty cannot exceed 25 percent of your total tax debt. In contrast, a failure-to-pay penalty is usually set at .5 or 1 percent of your unpaid taxes for each month, which also cannot exceed 25 percent of your total tax debt.
If you have already been penalized for failing to file or pay, you may qualify for relief under the First Time Penalty Abatement (FTA) policy. To qualify, the following must be true:
- You’ve already paid or arranged to pay any tax due.
- You didn’t previously need to file a return, or you’ve had no penalties during the three years prior to the tax year in which you received a penalty.
- You’re in compliance with all payment and filing requirements.
An FTA can only be claimed for a single tax period. It allows typically compliant taxpayers to request the abatement or removal of certain penalties. This can see a taxpayer saving hundreds and even thousands of dollars. Many taxpayers who may qualify for an FTA fail to do so, if only because they don’t understand how it works—or don’t even know that it exists. US Tax Relief can help you determine if the FTA applies to your situation, so give us a call today at (844) IRS-RELIEF (844-477-7354).
If you believe you owe the IRS, keep a close eye on your incoming mail. The IRS sends numerous notices to delinquent taxpayers; with each subsequent notice, the consequences increase in severity. The IRS will send notices for the following reasons:
- You have an outstanding balance
- You are due for a refund from the IRS
- They have a question about your return
- They amended your return
- There are delays in processing your return
Receiving a notice from the IRS can be intimidating but avoid the urge to ignore these letters. The letters may be a reminder of balance due, such as, Notice CP501. Each contains valuable information and waiting to take action can result in longstanding financial consequences. The sooner you respond, the sooner you’ll be able to minimize any interest and penalty charges incurred from your outstanding tax debt. Each IRS notice lists a number to contact at the top right corner; call the number provided. The IRS is more willing to work with taxpayers that are proactive about getting their debt settled. If you have more questions, we can help. Call today at (844) IRS-RELIEF (844-477-7354).