What are Back Taxes and What Should You Know About Them?
Paying your taxes on time is very important. You’re expected to file for a specific amount of money in taxes every year. When these taxes are not paid during that year, you’re considered to be owing ‘back taxes.’ If you’re currently owing back taxes, it would be wise to clear off that debt as soon as possible.
It is also vital that you know this. The IRS has a 10-year window to collect outstanding taxes. When that 10-year period is up, the statute of limitations prohibits any further action.
Dangers of refusing to pay back taxes
If you don’t pay the back taxes, interest fees are applied. Usually, a 5% per month interest fee is charged. This fee can also be increased to a maximum of 25%. If you agree to monthly installments to clear off the unpaid taxes, the penalty is reduced. This reduction benefit continues until the entire balance is paid.
What should you do if you’re owing back taxes?
We all live busy lives so it is very easy to forget to pay taxes. The best way to address this is to contact the IRS to pay those outstanding debts. If you cannot pay the full unpaid balance, a payment plan can be arranged. Payment arrangements are set up based on your ability to pay.
Need additional advice?
MWB Tax Solutions is here to help. We are experts in the business of settling all your tax-related issues. Our services include Tax Settlement, Tax Payment Plans, IRS Financial Hardships, Removal of IRS penalties, Back Taxes Settlement, and other tax-related matters.
If you need reliable expert advice, here’s what we will do for you:
– Assess your financial status
– Determine the best payment options
– Help to reduce or remove penalties
Give us a call today or message us. Schedule an appointment now.