The first step to getting a tax debt paid off, reduced, or forgiven is to simply get on the same page as the IRS regarding how much you owe. Unfortunately, you may have fewer options at your fingertips if you wait until the IRS alerts you to the fact that you owe money. Let’s talk about how to get a hard look at what you owe. This could be the first step to debt relief or forgiveness.
How Much Do I Owe the IRS?
You may be unclear on how much you actually owe in back taxes. Taxpayers have a number of ways to clear up any confusion regarding what they owe. Let’s run through how to handle the problem.
One option is to use the IRS’s online portal for taxpayers. You should be able to see the balance for each tax year that has an outstanding balance when you use the IRS’s online portal. However, the process isn’t exactly breezy. You’ll need to be prepared to provide documentation that allows the IRS to verify your identity. The list of required documentation includes the following:
- Date of birth.
- Your filing status.
- Social Security Number or Individual Tax Identification Number.
- Mailing address used for your last return.
- Email address.
- Phone number.
- Details for financial accounts.
It can be difficult to gather all of these details. What’s more, the online portal is only available during office hours without any sort of after-hours option for logging in online to obtain your records. The other thing to know about this option is that pulling up your record via the IRS portal will generate a “soft inquiry” on your credit record.
You can also call the IRS during office hours. Just make sure you have a big window of free time and access to any paperwork you may need to reference. Unfortunately, wait times on the IRS’s taxpayer phone line are notoriously long.
Lastly, it’s possible to submit a mail-in request to see your tax records. Any taxpayer who filed a Form 1040, Form 1040A, or Form 1040EZ can ask for what is called an IRS Account Transcript. However, be warned that this record is only going to go back one year. In addition, you may not see any of the penalties or interest that make up your full and complete tax bill.
Time is always of the essence when you’re attempting to get an idea of IRS taxes owed. That’s because penalties and interest may continue to pile on as you wait to hear back from the IRS, gather your information, or deal with technical issues within the IRS’s channels. This is one of the reasons why so many curious taxpayers simply get the help of a tax professional to handle the task. The urgency for handling the issue promptly and properly really grows once you consider that things like liens, levies, and wage garnishments could get closer to creating big complications in your life every day that your bill remains unpaid.
How Do I Know If I Owe Taxes?
You should receive a tax bill for the amount you owe if you haven’t paid your tax obligation in full. A bill from the IRS typically provides information regarding the balance due, penalty amounts, and interest. Keep in mind that a bill from the IRS is technically the first step in the collections process. Additionally, your unpaid taxes may be subject to both daily compound interest and monthly penalties.
Why Do I Owe Taxes?
There are several reasons why a taxpayer might owe taxes. It’s not necessarily true that only people who purposely skip tax payments could owe money to the IRS. Underpayment is a common cause of tax debt. Here’s a rundown of common reasons for IRS taxes owed:
- Not enough was withheld from your paychecks.
- Your tax bill rose unexpectedly without proper tax-planning adjustments being made.
- You made insufficient quarterly tax payments.
- You didn’t adjust your withholding to account for changes in your tax return or tax code.
It may be time to consider getting assistance with tax planning if you owe money due to underpayment. Specifically, a tax expert can help you to come up with a plan to withhold the right amount of money if you’re filing as an individual. There are also options for planning to put money aside to cover self-employment tax when the time comes. Of course, having your taxes professionally prepared may drastically reduce your chances of being caught up in late tax payments with the IRS.
How to Find Out How Much You Owe the IRS
Don’t stay in the dark for another day if you’re unsure about how much you owe the IRS. Tax Group Center works every day to help people get to the bottom of discovering exactly how much they owe. We offer a shortcut to how to find out how much I owe the IRS that will enable you to move forward with repayment or debt relief options right away. That may help you avoid very messy penalties and interest charges. If necessary, we can even dig deeper by making a Freedom of Information Request (FOIA) to see exactly what your case looks like from the perspective of the IRS. Tax Group Center has a team of licensed tax professionals, CPAs, and lawyers ready to handle all of your tax needs if you’re an individual taxpayer, self-employed taxpayer, or business owner. Give our office a call today if you have any questions at all about a tax bill.