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             05 March, 2024
 

    
Category:  Articles » Finances » Taxes

 

Why You Should File Your Taxes, Even If You Don't Have the Money to Pay

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         Views: 2169
2007-06-09 11:11:13     
Article by Cassandra Ingraham

You did your Taxes and much to your surprise you owe IRS. Not a lot, but more then you have in your savings account.

You delayed mailing your taxes because you did not have the money to pay IRS; this was your second mistake. (Your first mistake was not allowing your Employer to take more taxes out of your pay check each month) People get into trouble because they mistakenly believe that they need to pay the balance due when they file their tax return. Yes, it is best to pay when you file your return; however, if your cash flow won't allow a full payment there are other options.

If you send in your tax return at 11:49 PM on April 15, and you owe taxes, and you do not include the amount owed with the filed taxes -- it will take about 5 weeks before IRS contacts you. You will get 4 notices from the IRS every five weeks. It will be right around the first of September, when you will receive a certified letter from IRS. This is when they give you a 30 notice of Intent to Levy! (This time table is not set in stone; it can and sometimes changes depending on IRS)

One way that you could have avoided the dreaded "certified mail" from IRS was to send a partial payment with your tax return on April 15. Then send another partial payment when the second notice arrives and another partial payment when the third notice arrived and then paid the balance when the 4th notice arrived.

If it is too late for the above method, then by all means contact a trusted Tax Professional ASAP. You will need help BEFORE you receive the Notice of Intent to Levy. (This is when IRS garnishes your wages and they usually take out more then 50%)

You could contact IRS yourself, but it is not advisable. It is a federal offense to lie to a Federal Agent. You may not plan to lie to them -- but why take the chance? If you tell IRS the truth without explaining the conditions, you could end of having to pay more then you can afford each month.

For example, you are suppose to receive child support for your child each month. The child support is considered income, but if you forgot to tell them that your Ex did not pay the support payments 7 out of 12 months last year -- you could be in trouble.

Another example; Your Ex said he/she would pay the support each month, you have enrolled your child into a private school -- not realizing that IRS does not consider private school as a necessary monthly expenditure you mistakenly thought your monthly tax payments would be lower because of your high expenditures.

Another common example of why you may need a Tax Professional is; You spend $125 a month for top of the line cable choices that will give your children the best possible viewing of Education and Disney movies -- in the past, IRS has not considered cable as a necessary monthly expense. So IRS, more then likely, will decide that you have at least, $125., plus a good portion of the private school cost and any additional monthly cash flow to pay your Tax bill!

And, on top of all of this, the penalties and interest is compounding daily. A Tax Professional can not change your monthly expenditures, but he/she can help you to remember to include the dry cleaning cost, the cost of the dog's food and the dental bill that you forgot about!

Did I say it might be a good idea to contact a Tax Professional?

Cassandra Ingraham is a Tax Accountant and Instructor for Basic Tax Classes in the San Francisco Bay Area. During the balance of the year she can be found at http://www.taxeswilltravel.com providing Formal Introductions to Lenders for Accounts Receivable Funding (Factoring) and Purchase Order Funding.

Specialized in: File - Back Taxes - Funding - Tax Help - Factoring - Invoice - Line
URL: http://www.taxeswilltravel.com
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