Tax Questions You May Be Afraid To Ask
It’s not uncommon to keep some questions to yourself, even important ones. Whether you’re attempting to avoid certain topics or uneasy about hearing grim answers, you may choose to put off asking until it’s too late. When it comes to your taxes, there are a number of inquiries you may steer clear of ever making – to your detriment.
The discomfort of learning some hard truths about the IRS and what you can expect when there’s a problem may inspire you to bury your head in the sand. This tactic will not, however, prevent you from incurring a problem. The fact that you won’t see it coming will only make it worse for you in the end. When it comes to your taxes, there are some questions you should never shy away from.
“What will happen if I don’t file my back taxes?”
Everyone falls behind from time to time, even with their taxes. The trick is not to make a habit of it. If you have a previous year or years that have yet to be filed, that lurking anxiety is perfectly natural – and appropriate. Failing to file your tax returns is technically a crime, one which can be prevented by simply catching up. Now, there’s a chance that becoming current on your returns will result in a balance due, but that’s a separate concern.
“Will I be audited?”
You may have wondered this from time to time and the truth is that anyone can be selected for an audit. While taxpayers who engage in risky and potentially illegal endeavors may be more likely to endure an examination, the IRS also performs audits at random. The question you should ask is, “Do I have a reason to worry about an audit?” Assuming that you file your returns without error, unintentional or otherwise, there should be little cause for concern.
“What happens if I don’t pay this tax bill?”
Some debts go by the wayside, particularly if you’re struggling to meet the monthly cost of living. You might assume that a tax debt can be downgraded to such a low-priority item, but you’d be wrong. Any unpaid IRS balance will accrue monthly interest and penalties. Put simply, your original balance can double in only four years from added monthly charges.
“Even if the bill’s getting higher, do I really have to pay it?”
If you choose not to satisfy your tax debt, the IRS can and will become more involved in your finances. This can result in a tax lien, a wage garnishment or even a levy being placed on your bank account. Any one of these steps can be devastating and, without taking the proper precaution, can catch you at the worst possible time.
“What’s the best way to resolve any tax problem?”
There might not be a universal answer to every tax issue you’ll encounter, but there is a first step you should almost always take. Any time you’re handling an IRS matter, you should start by talking with a licensed tax professional. He or she will answer all of your questions – even the hard ones – during a free consultation. Further, they will inform you of how to prevent financial complications with the IRS altogether by negotiating a formal resolution. If necessary, a tax professional can work with the IRS on your behalf and get the answers you’ll need to the most important questions.