Tax season can be a stressful time. Independent contractors who do not have taxes taken out of their paychecks are particularly susceptible to this difficult time of the year, and often grapple with what to do if they cannot pay their tax liability.
If you are in this situation, or know someone who is, we have compiled the top tips for contractors who cannot pay their tax bill.
Tip 1 - File Your Taxes.
Even if you cannot pay all of your taxes owed, filing your tax return and paying what you can is the best course of action. From the first day after the filing deadline, the IRS will assess a penalty if you fail to file your taxes on time.
It is never a good idea to avoid filing your taxes. You may think that you can sidestep these responsibilities without too much consequence, but the truth is you will be penalized. The taxes owed will not go away, and your debt to the IRS will grow every day you fail to file.
Nothing positive will come out of not filing your taxes. If you think you are gaining financial freedom, you are mistaken. You can actually create many more problems for yourself and accrue more penalties and interest than you may realize.
Tip 2 - File An Extension.
If you are not prepared to file your tax return, you can file for an extension by April 15th. The tax return filing deadline is then extended from April 15th to October 15th.
Although filing for an extension is an option, it does not prevent you from having to pay your taxes. Remember an extension to file is not an extension to pay. If you can, pay as much as possible when you file for an extension to try and reduce penalty and interest amounts.
Tip 3 - Do Not Ignore IRS Notices.
If you have already failed to file and pay your taxes, you will be sent a series of notices once a tax return is determined to be delinquent. Do not ignore these notices! Call ATBS or your tax professional immediately. The best chance of getting you safely off that treacherous road is by working towards a solution as soon as possible. ATBS helps thousands of clients with tax resolution, and can determine the best course of immediate action.
Letters from the IRS will not go away, and they will increase in severity. Ignoring these letters will often culminate in garnishment of wages or settlements. Do not let it get this far! Getting out of a garnishment quickly is a difficult thing to do.
Tip 4 - Let The Experts Help You Get Caught Up.
At ATBS, we have an experienced team of experts in all things related to the IRS. We can work with you to identify applicable resolution strategies in order to reach tax compliance. We can also advocate on your behalf with the IRS as it relates to back tax delinquency.
Our team's intent is to be sure you reach as comfortable a resolution with the IRS as possible and that you leave the experience well-equipped to avoid IRS Collections in the future.
These issues can happen, but that’s why we’re here. We can help move you forward, and get you back on the road to success!
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Over 150,000 owner-operators have made the choice to hire ATBS over the past 25 years. We offer a variety of services including accounting, bookkeeping, and tax preparation. We also offer unlimited business consulting for our RumbleStrip Professional clients. A dedicated business consultant will help you keep your business “between the lines,” just like rumblestrips on the highway. If you’d like to learn more about ATBS services or want to get started today, give us a call at 866-920-2827.
