You’re doing your taxes, and suddenly, you find that you owe IRS back taxes. Don’t panic; everyone’s been in this situation before. Whether it’s negligence or you just didn’t have enough money to pay your taxes, having unpaid dues is always a bad thing. Thankfully, there are ways to pay them as soon as possible, as well as prevent it from happening again. Here’s all you need to know about back taxes, why you have them, how they’re important, and how you can avoid them in the future.
IRS Back Taxes | How to Avoid Owing More to the IRS
1. Defining IRS Back Taxes
Simply put, back taxes are unpaid taxes you owe the Internal Revenue Service. These unpaid taxes incur penalties that add up the longer the taxes remain unpaid. Most people will file their taxes early, but sometimes, details slip through their radars. If you’re one of those people, it’s best to check your accounts regularly to see if you missed anything. Having unpaid taxes is a hassle no one wants to go through. With that said, being responsible when it comes to filing your taxes is a good habit to develop.
2. Why IRS Back Taxes Are Important
The main reason why you must pay attention to your back taxes is due to the penalties you incur. The longer you put it off, the more fees and penalties you accrue; ultimately, more money to shell out. Having back taxes is not illegal. However, if you choose to avoid tax assessments through illegal means, you will be charged with tax evasion. Here is a list of penalties and charges you might incur if you do try to avoid your taxes. Word of advice from us — don’t!
3. Finding Out If You Owe IRS Back Taxes
If you want to know if you owe the IRS taxes, you can check the account viewer the IRS provides. This database contains the tax information of millions of American taxpayers, yourself included. Therefore, it is quite a useful resource to find out if you owe the government any taxes. Its database is updated every 24 hours. However, if you already paid your back taxes and it doesn’t reflect on the website, don’t fret. It takes around 2-3 weeks for unpaid tax payments to reflect on the website.
4. When to Pay Your IRS Back Taxes
The correct answer to this question is simple — immediately. As stated above, unpaid taxes will constantly incur penalties the longer they remain unpaid. These penalties can easily cost you thousands of dollars you could’ve spent on other, more pressing needs.
As soon as you find out you have taxes pending with the government, call up your accountant or boot up your favorite tax filing software. The sooner you get your taxes squared off, the better it is for you and your bank account. If you suspect you might have taxes you haven’t paid yet, check out the IRS account viewer.
5. Where to Pay IRS Back Taxes
To the IRS’ credit, they give you numerous ways to pay your taxes. There is IRS Direct Pay, which allows you to schedule regular tax payments online using your savings accounts. Another way is through your credit or debit card with a payment processor, which most banks have on their apps or websites.
If you like doing everything on your smartphone, IRS2Go is an official IRS app that allows you to pay taxes directly to the IRS using credit or debit cards. This app is available for both iOS and Android users. We highly recommend this app for those who are always on the go and don’t have enough time on their hands.
6. How to Avoid Future IRS Back Taxes
The best way to avoid future back taxes (and not have to pay the exorbitant fees that come with it) is to file your taxes early. We cannot stress this enough. Americans all over the country face problems like these every year, even though they don’t have to. File your taxes in advance and plan out expenses with your taxes in mind. Find an easy-to-use tax filing software and learn it.
Alternatively, you can hire an accountant to file your taxes for you, so you won’t have to spend time poring over forms and invoices. Diligence is the key to avoiding back taxes, and it’s something you develop over time.
What do you do when you owe $12,000 to the IRS? Here’s The Dave Ramsey Show with a few tips on how to pay back taxes.
Owing IRS back taxes isn’t necessarily a bad thing, but it’s a major inconvenience. Instead of using your hard-earned money on something more important, it will just go to the IRS due to the money you owe. With that said, it’s always good to keep an eye on your taxes and file them on time. Not only will this save you a lot of money, it will also foster a sense of responsibility and diligence you can apply to other parts of your life. We hope this little guide to understanding your IRS back taxes will be helpful to you.
Have you ever had IRS back taxes? Tell us how you solved this problem in the comments section.
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