Your Guide to Understanding Back Taxes, Pt. 2
Filing back taxes seems inconvenient and inconsequential. At face value, you might not see much point in doing so.
Filing back taxes seems inconvenient and inconsequential. At face value, you might not see much point in doing so. Despite that reaction, you’ve got to be on your guard. That’s because owing back taxes will put you on thin ice with the IRS. Taking the initiative to resolve this issue is the right move. But we understand that it can be a complex, time-consuming process that might not end up solving anything at all. As such, we’ve compiled a handy guide for filing unpaid taxes you still owe.
ggregate All of Your Tax-Related Documents
Start by assembling all of the documentation that you might need to submit. These papers will show that you had viable income for the applicable tax year. What this means is that you’ll need to track down your old W-2s, 1099s, and interest statements. Suppose you don’t already have an “important papers” binder or a series of spreadsheets saved to your computer. In that case, there is no time like the present to curate such collections.
Download the Necessary Forms
Since you’re probably using your computer to retrieve old tax records, take the time to find and download the other forms you might be missing. The Internal Revenue Service does provide a backlog of these forms, but since they occasionally change, be sure to acquire and complete the correct version. In 2018, the IRS revised Form 1040. As a result, the original 1040, 1040EZ, and 1040A were all rendered obsolete. FYI, the agency shifted much of the information contained in these forms to other schedules.
Make Sure You Use the Mail
Once you have filled everything out, you’ll need to print them. Sadly, you cannot use the Internet to file your back taxes. Your only option is to mail the hard copies. Tax professionals can guide you through the prep and submission stages so you can feel confident that everything is being transmitted correctly. Please be aware that you’ll be responsible for paying off the back taxes, relevant penalties, and accrued interest. If such circumstances present a financial hardship, a payment plan could ease some of that pressure.
ttractive Incentives for Addressing Your Tax Debt
Now, let’s turn our attention to some of the urgent reasons to eliminate your tax debt. First of all, you’re breaking the law. By getting rid of your debt, you can also absolve yourself of penalties and interest that continue to accumulate. Plus, receiving tax refunds and staving off credit obstacles are immensely beneficial to your financial future!
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