Tuesday, April 8, 2014

Haven't Filed Taxes in a While? Here are 5 Tips Specially for You

5 Things You Need to Know if You Have NOT Filed Tax Returns

1)     If taxes are owed, a delay in filing may result in penalty and interest charges that could increase the tax bill by 25 percent or more.  If you don't have the money, file anyway.  Otherwise you will get a penalty for failure to file on top of the late payment penalty.

2)     Filing an extension doesn't mean you've got additional time to come up with the cash. Interest is charged on taxes not paid by the due date, whether or not an extension is filed. Interest is also charged on penalties.

3)     Don't assume that because you're getting a refund, you don't need to file. True, there is nopenalty for failure to file a tax return if a refund is due, but by waiting too long to file you'll lose the refund. The return must be filed within 3 years of the due date.  Plus, if you're self-employed you won't receive Social Security credits towards your retirement unless you file tax returns reporting self-employment income within three years of the due date.

4)     Ignoring those letters from the IRS is not a winning strategy. Ignoring the IRS and repeatedly failing to file can result in more penalties and possible criminal prosecution.

5)     If you come forward, it's extremely unlikely you'll land in jail. Assuming your income is earned legally, you filed a return, and are trying to pay off the amount owed, the IRS is willing to work with you.

The IRS' Offer in Compromise program allows a delinquent taxpayer's debt to be settled for less than the full amount owed.  But taxpayers who have not filed or owe money should find a licensed tax professional to guide them through the maze of IRS rules and regulations. IRS itself licenses enrolled
agents. An "EA" can help get you out of tax trouble and keep you there. To earn the EA license, candidates must pass a background check and a stringent three-part exam on tax. To maintain the license, they must complete annual continuing education that is reported to the IRS.

If you are ready to file those back taxes Demetriou, Montano & Associates can help.  We have an excellent tax preparation department, and our core business is helping folks just like you work with the IRS to resolve old tax issue and get on with your life.  Call today and speak to one of our Enrolled Agents about the next step for you:

Jim Demetriou EA  888-987-1040
Mike Montano EA  888-987-1040

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