Right now, I am hearing some variation of this from more and more taxpayers, “I owe 2019 taxes I haven’t paid because of COVID-19. I know I’m going to owe for 2020, what do I do???”
I know we are in a CRAZY TIMES. The situation is unlike any other in recent history. There are many exceptions to long standard rules. But one thing remains the same. How to deal with the IRS and back taxes.
If you find yourself in this situation, follow these 3 simple steps to get back to sleeping at night.
1. File your taxes
This is ALWAYS the first thing to do. Grab a copy of TurboTax. Go online to IRS Free File. Contact a friendly tax preparing CPA (me). Download and print the forms online. Yes, the IRS still accepts paper returns.
However you do it, get those returns filed. The IRS will not discuss resolution of your tax debt if you unfiled returns.
2. Catch up on current year tax payments
If you normally pay your taxes through estimated payments, this is the first place to put your money. The important thing is to stop digging the hole. If you cannot stay current, you will never catch up on the old debt.
If your income comes from a paycheck, most sure you are withholding the proper amount. You do not want to OWE at the end of the year. Here is a great withholding calculator.
3. Use a Collection Alternative to sort out old debt
The IRS provides options for you. At this point most taxpayers work out an Installment Agreement with the IRS. But there are other options. Check out this recent post, “How to Resolve your IRS Debt Problem” for details.
Ready to fix your Tax Problems? Get Started today with your personalized, Free CASE REVIEW