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3 Tax Problems That Aren’t as Scary as They Seem

Posted by : Premraj | Posted on : Sunday, December 2, 2018

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Image via Flickr by verchmarco

No taxpayer wants to have problems with the IRS. It’s a huge government agency with far-reaching powers. That said, the reality is that many tax problems are easily resolved. It’s a myth that the IRS is out to put people in jail or bankrupt them. In most cases, the agency will work with you to find a solution that will satisfy you both. Keep reading to discover three tax issues that aren’t as scary as you might think.

Owing Back Taxes

Back taxes is a term for taxes that weren’t completely paid the year they were due. You can owe back taxes on local, state, or federal taxes, and they accumulate fees and interest. Owing back taxes is something to avoid, but if you have them, getting them resolved isn’t as scary as you may think.

If your business owes back taxes, contact a tax expert to guide you through the process of paying them. A professional can help you get the best possible outcome. If you can afford to pay everything you owe, you may find that the solution is as simple as writing the IRS a check.

If you can’t afford to pay, you still have options. You can apply for debt relief and may receive an Offer in Compromise, which allows you to settle your tax debt for less than you owe. Other options exist as well; your solution will be unique to your specific situation.

IRS Audit

Most people fear IRS audits, but they’re really not that bad. Most audits, about 70%, are correspondence audits, meaning they’re done through the mail. Correspondence audits are often so subtle that you might not even realize you’re being audited.

The other 30%, field audits, are conducted in person. If the IRS conducts a field audit on you it’s a good idea to hire a CPA or an accountant to help you. It’s not required, but it’ll make you feel better to have an experienced professional by your side.

As long you’ve kept decent records and were honest on your tax return, you shouldn’t have a problem if the IRS selects you for an audit. The majority of people only have to answer a few questions.

You Made a Mistake on Your Tax Return

Many people think that making a mistake on their tax return will result in a steep penalty. However, this is rarely the case. If you make a simple mistake, such as forgetting to report a stock you sold early in the year, you’ll probably get a letter inquiring about it. The solution is often as simple as writing a check for the amount you owe. In fact, if you lost money on the sale, the IRS might owe you money.

Tax season puts a lot of stress on a lot of people. Whether you’re anxious about an audit, making a mistake, or owing more than you can pay, try not to worry too much. In most cases, the IRS understands people make mistakes and will work with you to find a solution.

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