Didnt pay the IRS last year?

Question

I filed State and Federal and couldnt aford to pay them I kept meaning to but something always came up I have a family and the only reason I had to pay so much in isnt because I make a lot of money because I really dont make much at all I just did ALOT of over time I mean ALOT everyday and was doing that just to keep our heads above water. What is going to happen when I file this year? What will they do for about $800.00 of unpaid taxes over the course of a year?

Answer 1

It's important to pay your taxes on time, but if you don't the IRS will assess a late payment penalty of 1/2 of 1 percent per month, up to 25% of the amount of unpaid balance, plus interest per month which has ranged between 4% - 9% in the last few years.

http://www.irs.gov/businesses/small/article/0,,id=108330,00.html

Penalties and interest apply to years when money is owed. If you get a refund next year, the IRS will withhold it, and apply it to your balance due. You can contact the IRS and ask to see your tax account. They will also send you an account statement showing your current balance owed, if you ask for it.

The interest charged by a bank or credit card is often lower than what is accruing on your account at the IRS. It sometimes makes sense to borrow money from another source in order to pay off your balance owed to the IRS.

The same is generally true for state taxes as well. Contact the Department of Taxation to see your state income tax account, and to request a statement.

The overtime you worked bumped you up into a higher tax bracket and increased your percentage owed. If you couldn't pay your taxes because you had a family emergency, or other reasonable cause, the IRS has the ability to reduce the penalties they've assessed. You must contact them by calling or writing to your taxpayer advocate listed on your Notice of Tax Due.

http://www.irs.gov/individuals/article/0,,id=123423,00.html

Answer 2

Oh sweetie.

First your $800 is now around $1600 and going up by the minute. You can get a penalty for failure to pay which can be up to 100% of the amount owed. Then they start attaching interest, which is compounded monthly at a horrible rate.

You need to take care of this or it is only going to get worse. Have you received notices from them yet? If so, call the number and set up a payment plan TODAY and stick to it. Then when you get the original amount paid off, you can try and negotiate to remove some of the penalty and interest, that is called an "Offer and Compromise".

As for filing your taxes next year, the only effect this would have is if you are getting money back, they would probably keep it and apply to your past bill. Please keep in mind that if you owe again this year they will access a penalty if you have not remitted quarterly estimated tax payments to them.

It sounds like you need to decrease your allowances for your take home pay.

Please don't continue to put your head in the sand, trust me, you will regret it if you do.

Answer 3

At some point they'll contact you, and won't be happy by then. They can seize property that you have, or garnish your wages.

Your better path is to contact them and ask to set up a payment plan. They'll look at your financial situation, and set a monthly payment for you to pay. As long as you do, it'll be OK, but if you skip a payment, could mean real trouble.

In the meantime, interest and possibly penalties are accumulating, so your $800 debt has grown, and will continue to grow until it's completely paid off.

Answer 4

this is a good question. this year i filed and did not have the money to pay either. and i am not sure that i really owe it. i am going to pick up my last three years of income tax files from my accountant and take them to someone else so that i can refile them and things on them can be looked at and maybe recomputed so that i do not owe so much. you can do this for up to three years back. as far as if you really do owe them..well every day that you are late you are charged a huge amount of interest and penalty until the government own your a....s. try this web site for answers.http://www.irsgov/taxtopicsltc308html

Answer 5

They'll keep tacking on a late fee every month, until it becomes almost impossible to pay. Contact the IRS and set up a payment plan with them. They will work with you. I know it from personal experience.

Answer 6

you can make payment arrangments with the IRS or if you get a refund this year they will keep it and apply it towards your back taxes. Whatever you do dont hide from them. They will find you and garnish your wages if you dont keep in contact with them