When tax time rolls around, for some, it is exciting to see how much they will be getting back. For others? The thought of having to pay back taxes can be intimidating. There are reasons as to why one would pay back, which can be done via check or electronically. From individuals and small businesses, to trying to figure out what to do if you canâ€™t pay, use these tips from your local Denver accountant.
One of the top reasons individuals owe on their taxes is by not having enough money withheld out of each paycheck for taxes. This amount stems from whatever you elected in your W-4 form that you filled out when you started your job. For others, you might have a high amount deducted from your employer but if you are a freelancer or contractor that filled out a W-9 form, it is on you to pay. This happens because the employer you are doing contract work for is not responsible to take out the taxes. You may also owe more if you once had dependents that have since moved off your tax information. When you owe on your taxes, you must have the money paid to the Internal Revenue Service (IRS) by the deadline. The deadline for 2017 is Tuesday, April 18. If you are unable to pay your taxes by this date, it is best to review the options noted below.
Small Businesses or Self-Employed
When you have your own small business or are self-employed, you are responsible for paying the taxes. As a small business owner, you can make quarterly payments to the IRS to help. According to the IRSâ€™ â€œSelf-Employed Individuals Tax Center
,â€ anyone who carries on a trade or business as the sole proprietor or independent contractor, member of a partnership that carries trade or business or are in business with yourself must pay taxes on a quarterly basis. This process is known as â€œestimated tax.â€ This covers your Social Security and Medicare taxes. You will file your return annual as usual but will work with the IRS on the quarterly payment schedule.
What to Do if You Canâ€™t Pay
Life happens and some people are unable to pay back their taxes by the IRSâ€™ annual deadline. The IRS explains there are four options if you are unable to pay. They explain that your top priority is to make sure you file your return on time and pay as much as you possibly can. If there is a part or all you cannot pay, you can get a payment plan through them. The longer you stretch out your payments though, keep in mind that you will owe more in interest. They advise to consider getting a loan if it is possible as fees may be less than a loan through the IRS. On all circumstances, they advise to never ignore a tax bill.
With the tax deadline approaching, be sure you are preparing to file your 2017 Denver tax return
. If you need assistance or feel you might owe, Bloch, Rothman and Associates can help. We are your premier go-to tax specialists that can walk you through all your options. Youâ€™ll be happy with our quality service to make the process a breeze. To get started, call us at 303-321-7160.