DEALING WITH UNFILED EMPLOYMENT TAXES Taxes can take a big chunk out of your profits.…
File Your Taxes Now, Before It’s Too Late
The coronavirus has upended the lives of many. Some have gotten seriously ill, and some have even died. Many are struggling to juggle the demands of working remotely while also ensuring their children get a proper education and also worrying about keeping everyone safe and healthy. At least 15 million people have also lost their jobs since February, and many more have been furloughed, downgraded to part-time work, or taken a cut in wages.
The IRS extended the deadline to file taxes in response to the pandemic. Instead of April 15 as usual, Americans were given until July 15 to file their taxes for 2019. At the start of the pandemic, July seemed very far away. But it is July now, and the deadline is upon us.
Consequences for Failure to File
Many Americans feel overwhelmed and are struggling to make ends meet, and that might make some try to ignore or avoid the tax deadline. However, there are still penalties for failure to pay your taxes, even under our current extraordinary circumstances.
To start, you can be levied a fine for failing to file your taxes on time. Then whatever tax you owe will start to accrue interest. Not only will you still owe the taxes you do, but you’ll owe extra money for penalties and interest.
The IRS can also take action against you if a debt goes unpaid, including garnishing your wages or putting a lien on your property. Your financial situation can get much worse if you don’t face the problem head on and find a solution.
Working Out a Payment Plan
Instead of avoiding filing a tax return because you can’t pay, you should file the return and then negotiate an option for payment. You may be able to negotiate a payment plan that you can afford. You may also apply for (and receive) a three-month extension of filing your taxes, which can give you more time to come up with the money you owe. You’ll avoid the large penalty for failure to file. You’ll also give yourself time to lower your tax obligation by working with a tax professional to find deductions and credits.
Those who owe less than $100,000 in taxes (as well as applicable penalties and interest) can set up a repayment option themselves if they are able to pay within 120 days. There is no cost to do this, and it can be done online.
Those who need more time to pay what they owe may be able to set up an installment agreement. The amount owed must be less than $50,000. A setup fee applies, and it varies based on whether you set up automatic payments for the taxes owed.
Know that if you set up a payment plan with the IRS, you will still accrue interest on what you owe. That may lengthen the time to pay back the debt, but it will also help you to avoid large penalties and minimize your risk of facing more serious consequences or even losing your property. It’s important that you take some action rather than waiting to have action taken against you.
In some cases, the IRS may even accept a settlement offer that is lower than what you owe. However, the IRS accepts less than half of these offers, so it is recommended that you work with a tax lawyer if you want to improve your chances of success.
Working with a Tax Attorney
If you are struggling to pay your tax debt, you should work with a tax attorney to explore your options. Your attorney may be able to represent you in an audit, which could find ways to lower your tax debt, or could help you negotiate a settlement or payment plan with the IRS that makes it more affordable for you to pay.
The tax attorneys at Silver Law PLC can help you to negotiate a settlement offer, or they can represent you if you are currently under audit. They also represent clients who are seeking innocent spouse relief, who are managing foreign tax reporting requirements, or who are subject to civil or criminal tax litigation. Call us in Arizona today to talk with a tax attorney about your options.
7033 E. Greenway Pkwy, Ste 200
Scottsdale, AZ 85254
410 South Rampart Blvd, Suite 390
Las Vegas, Nevada 89145