Do you owe taxes? You are not alone. Many taxpayers fail to file their tax returns before the deadline. Because of this failure, you now owe back taxes to the government. Back taxes are those taxes that you have not paid for during the year that is now due.
You are probably afraid of what the IRS might do if you owe back taxes. Some people do get jail time in certain situations, given the severity of what they did. But unless you have been running from paying your taxes deliberately for years, it is actually easy to fix your situation.
For those living in Ohio, read through the list below to find out how to best handle paying your taxes.
- Do not put off communicating with the IRS about your situation – if you have been getting letters and notices about your failure to pay your taxes, make sure you do not ignore the warnings. You may think that compared to other individuals or even businesses, the amount you owe is not too big and would not warrant any real consequences. But you might be surprised that it will lead to consequences such as tax liens and bank levies if you ignore the problem. Don’t make the situation worse than it is. If you know that you owe taxes and you receive a call or letter, respond right away so that you can see what right and options you have as a taxpayer.
- If possible, pay your back taxes in full – if you have the money, it is better to actually pay your back taxes in full. You are usually allowed to come up with the full amount and pay it within 60-90 days. Paying in full will mean that you will not have to deal with too much interest and penalties. If this is not possible for you, there are other payment options that you can avail of. Instead of the full payment, you can just pay monthly, but do take note that there will be interest and penalties if you negotiate a repayment schedule. Also, be very sure that you will be able to pay as agreed upon. If you miss even just one payment, there is a possibility that you will be back to square one with your problem, and you would again need to convince the authorities to negotiate a repayment schedule with you.
- Consult with a professional to help you navigate through the system – you need to understand that you have rights as a taxpayer, and one of them is to have a competent person to represent you. It would be a good idea to hire a professional to help you know what the best options are for you when dealing with your back taxes. You can check with the state for a list of the most qualified professionals in your area.