How Do I Know How Much I Owe The IRS?
Nobody desires to be in debt with the IRS. Ideally, you would want to pay your taxes as fast as possible, but sometimes back taxes pile up at your disposal.
How much you owe will also solely depend on whether the tax relates to returns you’ve already filed or ones you still need to file.
It is possible to know how much you owe without contacting the Internal Revenue Service (IRS), but it is good to do so for certainty. It’s crucial to start settling your bills promptly or you will get into even more trouble.
Make it a habit to contact the agency regularly to confirm the amount and make payments.
This article will discuss five different ways to know how much you exactly owe the Internal Revenue Service:
Pick Up The Phone And Call The IRS
The only problem with this option is the overwhelming number of people who are also trying to get hold of the IRS. This means there may be a lengthy amount of waiting time in connecting with a specialist.
However, once you get in contact with a specialist, there should be no issue in getting your concern across.
You will know exactly how much you owe the IRS, and the specialist may even wait for you to make your payment. Once you’ve paid, the specialist will immediately process your transaction and you will no longer have anything to worry about.
Look Up The IRS’ Online System
This may be the most convenient choice, but it also comes with a lot of risks. This online tool has been designed merely for taxpayers to view their accounts with the Internal Revenue Service.
You will be able to see your payoff amount, the balance for each tax year that you owe, and up to 24 months of payment history. The transaction process is quick and should be done in less than 24 hours. It’s completely free to use as well.
Along with this comes the risk of getting your identity exposed. Gaining access to the IRS website requires a lot of your specific information, such as your social security number, credit card, address, and more.
If you still choose to make an account, your payment will show up after one to three weeks on the payment history page. You will now start receiving alerts from the IRS via mail as well.
File Or Review Your Tax Returns
Determining your back taxes may be as simple as filing or amending a previous year’s tax return. If you feel that your back taxes relate to returns you have not yet filed, then you can calculate the amount of tax you owe but never paid.
It’s not an easy process as you will have to find the material from the said year, which can take up some time.
For example, if it is 2020 and you failed to pay your tax in 2018; what happens is you will need to find the material from 2018, such as tax forms, schedules, and instructions.
The reason for this is if you pay your taxes from a different year, the IRS system will regard it as an error and you will be notified. You can find the forms on the IRS website or in “Turbotech.”
However, you will need to print and fill these out manually.
Send Mail To The IRS
This process will take longer than most because of the uncertainty of courier services. This is a big deal as penalties will continue to rise with each passing day when you haven’t paid your overdue tax.
Another concern regarding mail is the accuracy of your location. There have been missing mail cases, so the better option is to drop by the nearest post office.
If you have an account with the IRS, you will also receive mail from them. Check your mailbox if you have any mail that you may have missed out on.
The number shown may not be accurate as it does not include the interests and penalties since when the mail was sent. Another caveat is the mail the IRS sends.
The IRS will not give any notice for taxes that haven’t been paid in years. Instead, it will only show taxes that have not been paid in a year.
This may confuse a lot of people, so it is always best to call the IRS itself or visit their website online.
Consult Tax Debt Relief Professionals
There is always the choice of letting attorneys, CPAs, and EAs do these for you. Some may find these matters complicated, and they’d want someone explaining it further to them.
These professionals can work with the IRS on your behalf on the status of your tax liability. All you’ll need to do is tell them your personal information and situation and handle it for you.
Once they’ve done this, they can now offer customized solutions that you can do. They will explain this in simpler terms as opposed to talking to the IRS by yourself.
These professionals also have advanced interaction skills, so there should not be any issues between them and the IRS. The process should run smoothly.
Take Into Consideration The Taxes and Penalties
Even though you can pay your taxes late, you have to remember that there will be penalties for late payment. You may think you’ve paid the right amount, but you may get a call that you need a few more.
If you’re the one paying your taxes late, then you should be the one making an effort to make sure how much the extra charge is. If you pay your tax from 3 years ago with the price indicated on the slip, an error will be detected.
The best choice would be to pay your overdue tax through the phone so that you can talk with a specialist. You will be able to explain your situation, and you’ll now know what the additional penalties are.
Another option is to consult with a professional as they are trained to handle these kinds of misunderstandings.
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