Tax problems have historically been quite a daunting challenge. First, figuring out the exact amount to pay itself is quite confusing. It requires you to figure out all aspects of your income and expenditure throughout the financial year. Second, even after you file taxes, some minor errors in calculation can come back and haunt you in the form of penalties. Ironically, the sheer challenge of effective tax filing simply discourages people from interacting with it entirely, leading to a whole new host of problems.
Whether you’re an individual or a business owner, these issues can lead to severe financial consequences, including penalties, interest, and even legal trouble. It’s best to seek expert tax planning in Dallas, TX to help deal with the burden of tax problems. Here are the potential tax-related concerns that they tackle:
Non-Filed Tax Returns
One of the most common tax issues people face is failing to file tax returns. Whether due to negligence, forgetfulness, or a misunderstanding of tax obligations, non-filed tax returns can lead to major problems. The IRS requires individuals and businesses to file their tax returns on time every year, and failure to do so can result in penalties and accrued interest. An accountant can help individuals or businesses file missed returns, ensuring that they are completed correctly and submitted as soon as possible.
Back Taxes Owed
Back taxes, or unpaid taxes from previous years, can quickly become a financial nightmare. The longer you wait to pay, the more interest and penalties you will accumulate. The IRS can also take aggressive collection actions, such as garnishing wages, placing liens on properties, or seizing assets. Accountants specialize in navigating IRS procedures and can help taxpayers resolve their back tax problems through several strategies. One potential solution is setting up an installment agreement, which allows individuals to pay off their tax debt over time.
Payroll Tax Problems
Businesses are responsible for paying payroll taxes on behalf of their employees, including Social Security, Medicare, and income taxes. Failing to properly withhold or pay payroll taxes can lead to significant problems with the IRS, including hefty fines and penalties. If a business is facing payroll tax issues, an accountant is required to resolve these problems by conducting a thorough review of the company’s payroll processes, ensuring compliance with federal and state laws, and addressing any discrepancies in tax reporting.
Bankruptcy and Tax Debt
Filing for bankruptcy is a difficult decision for individuals and businesses, but in some cases, it can provide much-needed relief from overwhelming tax debts. However, not all tax debts are dischargeable through bankruptcy, which can complicate the process. For instance, income tax debts may be eligible for discharge under certain conditions, but payroll and trust fund taxes generally are not. As such, an accountant is in the best place to decide how bankruptcy should be approached to make it more feasible.
Innocent Spouse Relief
Tax issues can sometimes arise from a joint tax return filed by spouses. If one spouse is unaware of the other’s incorrect reporting or fraudulent activity, they may be held responsible for the tax debt. However, the IRS offers “Innocent Spouse Relief,” which can absolve the innocent party of responsibility for the tax debt. An accountant can assist in applying for Innocent Spouse Relief, ensuring that all necessary documentation is provided to the IRS.
It is technically possible to navigate these solutions yourself, similar to how filing taxes yourself is possible. However, by actually engaging the services of an expert, you can ensure success in a chosen approach. This involves anything from actually having taxes filed on time to successfully dealing with tax debt. When tax season comes around, make sure to reach out to an expert accountant!
