Let’s talk about something fun… tax problems!
Totally kidding… Taxes are about as complicated as it gets, but if you don’t at least try to understand them (or get an Accountant for that!) then you are in BIG trouble.
You have enough on your plate with your business, you definitely don’t want to be worried about unexpected payments, penalties, and fines.
Q3 is upon us and before you know it, Summer 2022 will be a wrap. Do you know what actions you need to take to stay far away from the IRS’s bad side?
Let’s talk about it! 4 common IRS tax problems
- Failure to file a return at all
Every American is expected to send in a tax return (unless you meet these requirements). It doesn’t matter if you owe money or if the government owes you, you gotta file your taxes. If you are owed money, failure to file might result in not getting that refund at all. You can also be charged hefty fines. Just file your return… That’s the most important part.
- Failure to pay taxes
Failure to pay taxes or underpayment will also send red flags and trigger the IRS to act. If you fail to pay your taxes AND file a return, you will be charged penalties and interest. File your taxes and make a payment as early as possible. Because I’ve seen instances where the penalty owed exceeded the tax. That happens when you delay for months and years on end. You can’t outrun the IRS; the longer you delay, the more your outstanding balance grows and grows. Take action by working with an Accountant to clean up the mess for for.
- Notification of tax levy
If you weren’t scared by the money you’d be losing over fines and interest… Failure to pay taxes can lead to a seizure of your property and bank accounts. This is what’s known as a tax levy. Although the IRS will notify you multiple times before levying your property, this generally happens without going to court. You’re in some serious trouble if you get to this point. Do not ignore the notices. Work with an Accountant who can handle it and get you out of the sticky situation.
- Notification of tax lien
This is another way the IRS collects unpaid tax debts. You receive a notification from the IRS asserting the government’s right to your property or assets. They can garnish your wages so that they get paid what you earned. This is their way of recouping whatever you owe them…by any means necessary. You definitely don’t want to be in this pickle. And if you are, running won’t help. Unless you run straight to an Accountant. Pay that person whatever it takes to resolve the matter. The only way to take back your life from the hands of the IRS is to take action.
You won’t believe how common these issues are. They are so common, the IRS dedicates millions of dollars in resources every year.
So, how do we avoid these problems? Simple:
- File your taxes.
- Make your payments.
- Work with a tax professional.
That last one is especially true for anyone with assets including a business. Hiring a tax professional is an investment to your long term well-being and financial success.
And regardless of if you have assets or not, if you find yourself facing a levy or lien or any other issues, then please seek help from a tax professional. We know our stuff because we study the trends, laws, and tax regulations. Take some weight off your shoulders and ensure your taxes are being handled correctly to avoid costly mistakes.