By Jason Green, CPA
If you’ve fallen behind on your taxes, you’re not alone. Many individuals and businesses find themselves in this situation. The key is to address it promptly to avoid penalties, interest, and potential legal issues. Here are some steps to help you get caught up on back taxes quickly.
1. Gather Your Documents:
Start by collecting all necessary documents, including W-2s, 1099s, and any other income records. Gather receipts and documentation for deductions and credits you’re eligible for. Having all your paperwork in order will make the process smoother and faster.
2. File Your Late Returns:
Even if you can’t pay the full amount, it’s important to file your tax returns as soon as possible. The IRS imposes penalties for failing to file, which can add up quickly. You can file your returns electronically or by mail. If you’re missing information, use IRS Form 4852 as a substitute for W-2 or 1099 forms.
3. Pay What You Can:
Pay as much as you can with your filed returns. This will reduce the amount of interest and penalties you’ll accrue. If you can’t pay in full, consider setting up a payment plan with the IRS. The IRS offers several options, including short-term and long-term installment agreements.
4. Seek Professional Help:
If your tax situation is complicated, it might be wise to seek help from a CPA or tax professional. They can help you navigate the process, ensure you’re taking all eligible deductions, and negotiate with the IRS on your behalf. Take the first step by requesting a meeting with Speedway Tax today.
5. Consider an Offer in Compromise:
If you’re facing significant financial hardship, you might qualify for an Offer in Compromise (OIC). An OIC allows you to settle your tax debt for less than the full amount you owe. The IRS considers your ability to pay, income, expenses, and asset equity to determine your eligibility.
6. Stay Current:
Finally, ensure you stay current with your taxes going forward. File and pay your taxes on time to avoid future issues. Set up reminders or work with a tax professional to keep you on track.
By taking these steps, you can get caught up on back taxes quickly and move forward with peace of mind.
