This is an annual ritual for many taxpayers: looking up How Much Do I Owe the IRS for the year. The deadline is April 15th, but you can still estimate How Much You Owe in Taxes to get a head start on your taxes.
This post will walk you through how to figure out how much you owe the IRS and provide helpful tips along the way!
How Much Do I Owe the IRS?
If you owe money to the IRS, you might be wondering how to untangle the confusion surrounding your outstanding back taxes.
Whether you made an honest mistake or were unaware of a tax law change, the IRS can assist you in resolving a tax issue resulting from unpaid taxes.
There are several options for correcting an IRS problem caused by non-payment of taxes, but it’s critical to get started right away working with the IRS to avoid messy issues such as interest, wage garnishments, tax liens, and more.
Fortunately, the IRS has provided several clear instructions for determining how much you owe, paying your taxes, or settling your account.
Here’s a rundown of everything you need to know if you’re seeking out information on IRS taxes owed.
How Do I Know If I Owe the IRS?
If you owe money to the IRS, you’ll receive a tax notice in the mail for the whole amount. The balance owing will be shown on your bill. You will also see any fines or interest charges added to your tax statement.
It’s crucial to note that this legislation is simply the IRS’ initial effort in collecting money owed. If you don’t pay your debt on time, daily compound interest and monthly fines will begin to accrue.
Filing or reviewing tax returns might provide you notice that you owe the IRS money, although receiving a bill may be a shocking way to find out you owe money to the IRS.
It’s critical to file any outstanding tax returns as soon as possible if you have any of them tucked away. Filing them ensures that you start receiving tax payments while penalties and interest accrue.
In addition, the IRS.gov website may show you that you owe back taxes to the IRS. After completing the registration procedure, you will be able to access the IRS Account Information portal to see how much you owe in taxes for each tax year.
If you’re not necessarily tech-savvy, you can also contact the IRS by phone at 1-800-829-1040 (toll-free) from 7:00 a.m. to 7 p.m. from Monday through Friday.
How To Figure Out How Much You Owe the IRS
If you’re not sure how much you owe the IRS, there are a few of options for finding out. You might want to check your tax records first to ensure that you have paid your most recent tax obligation.
However, if you don’t have clear tax records accessible, there are a few more immediate methods.
Request a Transcript
The amount on your bill from the IRS is the sum you owe. You might be interested in seeing your tax transcript for yourself so that you can do your own research.
You may receive your IRS transcript online by requesting a copy.
Online: you can view your IRS transcript online if you already have an IRS account created.
You may request a transcript if you don’t have an IRS account by providing your Social Security number, birth date, and mailing address for your most recent tax return.
Transcripts usually arrive within ten days.
Visit an IRS Office
You can go to your local IRS Tax Assistance Center (TAC) to inquire about an existing IRS balance. To schedule an appointment, call the office in your area. Bring along a current government-issued photo ID and your Social Security number if possible.
Ask a Tax Professional
Of course, the IRS will evaluate your records and findings in order to provide you with tax numbers. Your records may show that the amount of taxes owed is less than what was reported by the IRS.
This is where it might be a good idea to get help from a tax specialist who specializes in tax issues.
Why Do I Owe Taxes?
Someone may owe taxes for a variety of reasons, ranging from incorrect tax preparation to arithmetic mistakes. It’s not always the case that people who purposefully avoid paying taxes are the only ones who can incur a penalty.
In many situations, people owe tax money as a result of missed tax payments.
Here are a few of the most typical reasons why individuals get into debt with the IRS:
- I forgot to file taxes.
- Filed your taxes incorrectly.
- I didn’t realize you owed taxes.
- It didn’t hold enough from your paychecks to cover your tax bill throughout the year.
- Didn’t properly adjust your tax planning strategy when your tax bill rose.
- Failed to adjust your withholding amount to keep up with changes in the tax code.
- You made a math error when filing your taxes.
- Made a math error when paying your tax bill.
- You didn’t have enough to pay your total tax bill when you filed your taxes.
Unfortunately, even if you did not intend to miss your taxes, you will still owe money. If you failed to pay the IRS, there’s a good chance you neglected to file your state taxes as well.
If you fail to file and pay your state taxes, you might be about to receive a tax bill for them. Failing to submit or pay state taxes may result in fines or other penalties if you don’t take care of it now.
How Long Can You Owe the IRS?
Penalties begin to accumulate on the day after the filing deadline. The IRS has a ten-year statute of limitations for collection actions. That means that the IRS has ten years from the date your taxes were assessed to pursue payment through collection.
However, each state has its own tax collection legislation.
How to Pay Your Tax Bill to Stop Owing the IRS
The simplest approach to eliminate your IRS debt is to pay off your obligation in full. However, not everyone is in a position to make a lump-sum payment to the IRS. The IRS has proven itself to be quite compassionate when it comes down to helping taxpayers who are unable on account of financial difficulties.
The only general condition that affects your eligibility is whether or not you have filed all of your tax returns.
The most common tax relief solution offered by the IRS is
- Installment Agreement (IA). Under this arrangement, a taxpayer has 72 months (six years) to pay off a tax debt using monthly payments.
- Additionally, an option like an Offer in Compromise (OIC) may allow you to settle your IRS tax debt for less than the total amount.
Are Failure to Pay and Failure to File the Same Thing?
The IRS’s approach to failure to pay versus failure to file is the last major aspect to address when it comes to understanding how to manage an IRS tax debt.
Failure to pay applies if you do not file by the filing deadline without requesting an extension.
Failure to file applies if you don’t pay the taxes reported on your return by the deadline. While you can request an extension to file, the extension doesn’t extend your payment deadline.
You’re obligated to pay your expected tax debt by the due date, even if you don’t file your taxes owing to an extension. If you do not pay the entire tax amount on time, you may be subject to a failure-to-pay penalty. The failure-to-file penalty is generally more significant than the failure-to-pay fine.
Find Out if You Owe the IRS With Help From Tax Professionals
Let the tax experts handle any back taxes owing to the IRS. Our staff will assist you in determining exactly how much the IRS claims you owe.
We’ll also assist you in determining tax relief options or payment choices with the IRS. For 30 years, we’ve been assisting taxpayers in settlements with the IRS. Please get in contact with us right now!