At some points in our seemingly normal life, back tax issues are things that we have to deal with regardless of our manner or standard of living. As we know, problems are best resolved earlier than as at when due, before they lead to more complications, and when it comes to back tax, the assertion is any less same.
You may be in those not so nice moments when you have unfinished business with the IRS as regards a tax dispute. While you may want to think of procrastinating doing the right thing with respect to time, remember that it is better fixed now than later. You certainly do not want to it to get to the seemingly impossible extent of having IRS officials come knocking on your door demanding that you pay up your tax debt and threatening to accord you disciplinary measures. That’s a long shot, though.
Delayed Reimbursement
You need to resolve your back tax issues in order not to have your reimbursement delayed. With spring vacations just around the corner, you will want to keep as much money as you can. If you wait till the eleventh hour before resolving, it may be hard to file the tax and claim your refunds else you get dinged with a late-filing penalty and you will also have your refunds held up on an equal disservice. You must have heard when some persons preach about not giving Uncle Sam an “interest-free loan”. Should you fail to file your taxes, this financial injustice will be sure prolonged at the detriment of your wallet. You would essentially be giving up the avenue you have to save up or invest money at a higher return.
Late Penalties
It is fair to expect some degrees and a series of penalties for defaulting in filing your tax return. That is, having considered the essence of doing so. If you belong to the bandwagon of people who owe the government, you need to shake a leg and get that back tax in as fast as it can be. If you delay in your filing and payment owed, you will no doubt be charged a maximum penalty of 5% of your unpaid taxes each month the bill goes late.
Tax Refund Forfeiture
You need to resolve your back tax because if you don’t, you stand a big chance at forfeiting your tax refund. If the government owes you a reimbursement, it is not rushing to pay you back. A three year period is even given to you after you file to claim your tax refund. This is a generous window, but after it, the IRS will see your unclaimed refund as a generous donation and put you out from your rightful money. Simple!
All the advertisements you may come across on radio or TV from different companies who claim that they can save you hundreds of cents on the dollar if you retain them to negotiate the resolution of your tax liabilities may be too good to be true. You need to do it and do it yourself because you’re better of handling your tax issues yourself.
In a nutshell, payment of your back tax issues shouldn’t be taken lightly. There will always be penalties and interests on persons who fail to resolve their back tax issues as at when due. Remember, the faster you act to resolve any issue on your back taxes, the better your chances of avoiding consequential penalties that might brew up in future.