How to Find Out If You Owe Back Taxes
How much taxes will I owe?” That’s a valid question every year, come April 15th. In fact, “How much do I owe in taxes” must be one of the most popular internet searches for taxpaying Americans. For good reason.
When it comes to the IRS, “how much do I owe” is undoubtedly your biggest concern. But it’s important to understand that there is a chasm between needing to pay a tax bill in the coming year and having an old balance lingering in the dark. Recognizing the striking difference between “how much will I owe in taxes” and “how much do I owe the IRS” can mean avoiding serious problems.
The Most Important IRS Question to Ask,
or, “how to find out how much I owe the IRS”
If you file and pay your taxes on time each year, you may never consider how to find out how much you owe the IRS. The reality, though, is that you can have a tax debt and not know until it’s too late. For instance, if you forgot to include gambling winnings on your return, you may have failed to report taxable income. What about money you received from a legal settlement? Accepted any side work for which you were paid under the table? If so, “do I owe the IRS?” should be your next question.
Your first order of business should be to verify that the IRS has your most current address. If they do, particularly if this hasn’t changed in the last four or five years, there may not be much to find out; “how much I owe the IRS” may be irrelevant. Since the IRS will send you notices regarding any problem with your return or a potential balance due, you can rest assure that you’ll at least be kept in the loop. But if your address has changed and you haven’t notified the post office, those notices may never reach you.
Let’s start with the most recent year you might question. Maybe you never asked, “How much will I owe in taxes for 2014?” You might have even have gotten a refund. But was your return prepared correctly? Bear in mind that the IRS will likely dispense a refund based on your return calculations and only later, after a closer look, will they determine that there are discrepancies. You might be in the clear. But how do you know? You have to ask yourself, “How do I know how much I owe the IRS?” If you do receive an IRS Notice of Assessment, informing you of a balance, or you detect an error on your return, it’s best to act sooner than later.
Help Yourself or Find Professional Help?
So, you move past the denial stage and you’re able to admit, simply, “I owe back taxes”. What next? You have a few options. You can opt to work directly with the IRS to find a solution. After all, you may not be able to pay back the entire balance all at once. You might be able to negotiate an agreement to pay back your debt over time. The important point here is that you’re handling the situation, not just asking “how do I find out if I owe back taxes” and walking away.
But you do have to protect yourself. If you think that the IRS’ assessment is possibly incorrect, or you owe back taxes, cannot pay them and don’t know what to do, you should strongly consider enlisting a licensed tax professional to help. An experienced tax pro knows the right questions to ask with the IRS, based on your unique circumstances, and knows how to keep you from committing to a payment that you can’t afford. When in doubt, defer to a licensed tax professional. He or she knows how to find out if you owe back taxes; online searches are good place for you to start looking for a reputable tax pros such as those at the Tax Defense Network. Just don’t wait too long to ask yourself whether or not you should.