Most people do their taxes every year with little or no fanfare. Maybe they have a minor life change, like changing jobs or moving, that might make a small difference to their overall tax picture; but many won’t have any major changes.
However, there are others who have major changes that influence not only their tax bracket, but even the way the file taxes.
For example, if you go from working for an employer, to working as an independent contractor, you will have to pay self-employment tax for the part of the year that you worked as an independent contractor. Depending on how long you worked as an independent contactor, and how much you made, you could end up owing taxes.
In another example, if you get married and you change your status to “married, filing jointly,” that could also change your tax bracket, and the amount you owe. On the other hand, if you get separated or divorced, all of the financial baggage that comes with that can also affect your taxes.
If you have never owed taxes before, chances are you aren’t prepared to shell out money come tax day. This is especially true if money is tight and you are expecting, and in need of, a tax refund.
If you do find yourself owing taxes, you might need the assistance of the professionals at Authority Tax Service, or a similar organization to help you deal with the IRS.
Why get professional help?
If your tax liability is small, you might be able to pay it off in one lump sum, or make payment arrangements with the IRS. In most cases, the IRS is willing to accept a small amount of money when you file, then regular monthly payments until the balance is paid off. You might even be able to set up a payment plan without paying a portion up front.
Most payment arrangements are approximately five years. If you owe $25,000 or less then you would pay approximately $$5,000 per year or $416 per month, not including any interest or fees.
However, if you continue to owe taxes every year, your total liability will grow, and so will your monthly payments. If your tax liability is more than $25,000, you may not be able to make payment arrangements at all, or they could remove your existing plan.
A professional tax service can work with the IRS to reduce the interest and fees, and reach a settlement on the amount due. They may even be able to reduce your liability to an amount that you can pay off within a few months, instead of years.
Additionally, these services can review your existing tax information to make sure you haven’t missed anything, like credits or deductions that could reduce your liability. If they do determine that your previous taxes were filed incorrectly, they can submit a corrected or revised return to the IRS and lower, or even remove, your tax liability.
If you currently owe the IRS more than $25,000, it’s a good idea to look into the Authority Tax Service, or a similar tax service company, to see if you can remove the interest and fees, and reduce your liability.