Back Taxes Basics
If you have delinquent taxes, there are many do’s and don’ts. Unfortunately, since you’re not given a guide when you first start filing, back taxes can sneak up on you. If you review some IRS basics on when to file and how to file, back taxes should never be a problem.
Avoiding IRS Back Taxes by Following the Basics
First and foremost, it’s essential to get your individual tax return in on time. If you owe and forget to file, back taxes are sure to follow. Next, make sure you cover any liability by the due date (it’s a lot easier paying what you owe rather than paying back taxes with penalties and interest six months later). While these steps might sound like common sense, an overwhelming number of IRS issues are created each year by well-meaning but neglectful taxpayers.
What Are Back Taxes and Why Should You Worry?
You know it’s important to pay back taxes as soon as possible. But do you really understand the difference between paying tax on time or well past the due date…and what you could be facing with the IRS? “Back tax”, or delinquent tax, is any unpaid tax balance that the IRS can ultimately collect on. This can result from simple oversights such as unfiled returns or misreported income.
When you owe back taxes, IRS collection action can be swift and decisive. The longer you wait to file or pay, the greater your chances to see a wage garnishment, a bank levy, or any other type of tax levy and even a federal tax lien from the IRS. If you have an unpaid liability, you’ll receive an official notice requesting immediate payment. Whether you opt to pay back taxes online or through the mail, you’ll want to take care of your tax debt as quickly as possible.
“How Do I File Back Taxes?”
In the event that you skipped a few years’ returns, you may be worried – for good reason. Unfiled tax returns can lead to serious complications with the IRS, including possible legal action. Additionally, if the IRS does assess a balance against you – whether you’ve filed or not – you’re in for a long haul. Unlike most creditors, IRS back taxes statute of limitations runs for ten years.
If you’re wondering, “can you file back taxes online?” the answer is, “yes”. Before you do, though, your best course of action is to consult with a licensed tax professional. They will advise you on what course of action to take and they can also answer one of the most important questions for you: “how many years can you file back taxes?”
Although general rules may apply to your situation, everyone’s circumstances are a little different. When it comes to unfiled years or back taxes owed, an experienced tax professional can be trusted to be thorough in determining which resolution or if one of the IRS payment plans is going to work best for you. Rather than dealing directly with the IRS yourself, strongly consider a professional tax resolution company, like Tax Defense Network, to assist you in handling any problem with back taxes.