Tax obligations can be complicated and, thus, must be avoided. It doesn’t matter whether you are a self-employed worker or someone who owns a company, filing taxes are crucial. You will also have to make a note of and report your income.
Therefore, it is essential to file back taxes. In case you fail to file back tax, there will be a lot of penalties and interests piling up. In this article, you will learn about the main reasons for you to file back taxes. Filing back taxes can undoubtedly keep you away from the unnecessary trouble that IRS issues can lead to.
Reasons to file back taxes:
IRS will prepare a return for you otherwise
In case you fail to file your returns, the IRS has the authority to prepare one for you. Even though it sounds beneficial, it is not!
Any return that is prepared by the IRS is known as the substitute for return, and there won’t be any advantages for you. So, if you are self-employed and you wish to deduct your business expenses, the IRS won’t be doing that. Similarly, there can be various other deductions. However, substitute returns won’t include these benefits.
In the majority of the cases, the amount that you will have to pay will be lesser if you file your return. In such cases, hiring professional tax resolution services can come in really handy. They can advise the deductions that are applicable and do everything in a timely manner.
Unpleasant IRS enforcement
A lot of independent contractors and small business owners feel that they would pay back the taxes once they are financially stable. However, this strategy can only make matters worse.
It can lead to IRS enforcement that is highly unpleasant as the IRS will start sending notices. Also, in case the amount is significant, you might even get a visit by an officer.
There can be significant penalties for back tax filing. Therefore, you should file your returns on time the earliest possible in order to minimize the penalties.
Make sure you include every single one of the deductions, credits, and expenses that you are eligible for. In case you do owe and can’t pay, the IRS will provide some suitable plans for repayment or other alternatives. You can also seek professional and expert advice for tax resolution. These services can be really beneficial in such situations. However, make sure that you don’t add further to the problems by avoiding filing returns. You can even set aside some amount or estimate a rough amount for payment to keep yourself ready when the time comes.
Reduction in your self-employment income
There is a separate department in IRS that is dedicated to those who make their living other than being employees. This is the IRS Self-Employment or IRS Small Business department. So, this department basically has a collection function along with the authority to enforce filing or return. It can also levy your assets or income and even go ahead for filing a lien on the property that you own.
The IRS is known for enforcing the filing of a late return when it comes to self-employed people. This is because they have a higher chance of owing when compared to wage earners. Therefore, in situations like these, the IRS could continue taking the earnings that you make until and unless you start to file back taxes. They can do this until you return the entire amount as you owe.
Don’t risk your future Social Security benefits
Especially for those who are self-employed, they must pay a self-employment tax. This consists of Medicare and Social Security. Therefore, if you want to be clear the eligibility criteria for Social Security benefits after you retire, you should have some work experience and also paid the IRS for Social Security for a specific period.
Those who failed to file returns and pay this particular tax, their earnings weren’t counted for that many particular years for future benefits. In fact, this would directly impact the quality of life and the income that you make in the future as well.
You might need these returns for other reasons
In case you are applying for a mortgage or personal loan, there are chances that you could be asked to give copies of the returns for proof of income. A lot of independent contractors and self-employed people are required to provide information on back tax filing.
In fact, for child support hearings or divorce, you will be required to provide copies of your returns. Therefore, you should make sure that the filings were done properly.
Start paying your back taxes
If you have any pending back tax filing, you should start filing them as soon as possible. This would avoid interests, penalties, and other IRS issues. You can either start filing your back taxes yourself or opt for professional tax resolution services. The experts can help you in filing your taxes and get you out of a tough situation as and when required.
There are plenty of plans and alternatives that the IRS offers. Therefore, it is important that you seek help from someone who has all the necessary knowledge. Professional tax resolution service providers have experts to help you file your returns properly.
What is the next step to settling back taxes?
It is essential for taxpayers to know that staying current with filings is the most important step after settling with the IRS for back taxes. Platinum Tax Defenders offers special programs to help their client stay current with their IRS debt. This will help them stay compliant with the IRS and their tax resolution terms with the Internal revenue service.
About Platinum Tax Defenders
Platinum Tax Defenders is an experienced company that was started in 2011. Since then, the motto of the company has been the same. We aim to provide professional tax resolution services for individuals and businesses to help them get financial freedom.
Expert professionals at Platinum Tax Defenders can help you file back taxes and get IRS debt relief, as well as, wage garnishment release, bank levy releases, penalty abatement, payment plans, bookkeeping services, IRS hardship programs, settling payroll taxes and offshore bank accounts. With our experienced professionals, we aim to get results that no other tax resolution service provider can get.
We also focus on providing quality and trustworthy services to our clients. So, if you are facing any issues related to the IRS or if you want someone to file your back taxes for you, you know which company to choose! Get in touch with us and get yourself a free consultation today! Remember, it is always better to come out of the issues at the earliest possible to avoid further troubles, which could be worse for you.