How To Find Out If You Owe Back Taxes

Timeline For Unemployment Tax Refunds

With the latest batch of payments in July, the IRS has now issued more than 8.7 million unemployment compensation refunds totaling over $10 billion. The;IRS announced it was doing the recalculations in phases, starting with single filers with no dependents and then for those who are married and filing jointly. The first batch of these supplemental refunds went to those with the least complicated returns in early summer, and batches are supposed to continue for more complicated returns, which could take longer to process.;

According to an igotmyrefund.com forum and another discussion on;, some taxpayers who filed as head of household or as married with dependents started receiving their IRS money in July or getting updates on their transcript with dates in August and September. No other official news from the IRS has been issued regarding payment schedule.;

What Are My Options If I Cant Pay Back Taxes Owing To Cra

It is not a good idea to ignore CRA collection attempts. CRA has very strong collection powers under the Income Tax Act and the Excise Tax Act to pursue CRA tax owing including the ability to issue a CRA wage garnishment, seize money from your bank account or put a tax lien on your home or other real estate.; They do not need a court order to take any of these actions. Owing a high tax debt can also impact your credit score.

Learn More:;CRA Can Freeze Your Bank Account. Heres What To Do About It.

If your CRA debt is large, you need to act fast to avoid these financially draining CRA collection activities. If youve reached the stage where you cant afford to repay old outstanding taxes, then you have two options available to you in Canada for tax debt forgiveness.; It is important to know that these options are only available through a Licensed Insolvency Trustee in Canada.; No other tax professional can help you avoid paying back taxes you legitimately owe.; Only an LIT has programs designed to eliminate tax income tax debt or source deductions.

You can file a consumer proposal to negotiate with the CRA to repay what you can afford. Any other debts you owe will also be included in the proposal.; A proposal is accepted when more than half of your creditors, based on the dollar amount you owe, vote in favour of your offer. If the CRA is your largest creditor, they will need to be onside with any offer you propose.

Should I Hire A Tax Relief Company

Tax relief companies typically offer to help taxpayers in distress. Some of them can be helpful if youre confused about the process or need help filling out forms. But remember:

• The IRS rejects most applications for offers in compromise.

• If a tax relief company loses or delays your application, youre still on the hook for your tax debt, interest and penalties with the IRS.

• You may have to pay an upfront fee to the tax relief company, and it may be a percentage of the tax you owe. That fee may be higher than what you end up saving on your tax bill if the IRS accepts your offer in compromise .

• Tread carefully, the Federal Trade Commission warns; there are some bad actors out there. “The truth is that most taxpayers don’t qualify for the programs these fraudsters hawk, their companies don’t settle the tax debt, and in many cases don’t even send the necessary paperwork to the IRS requesting participation in the programs that were mentioned. Adding insult to injury, some of these companies don’t provide refunds, and leave people even further in debt,” it says.

Some tax relief companies will charge you a fee to determine how much you owe the IRS, set up a payment plan or see if you qualify for an offer in compromise. But these and other things you can do yourself for free:

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How To Find Out How Much You Owe The Cra

The first step in determining how much you owe CRA is to file back tax returns. Filing late will increase your tax debt, making it harder to deal with.; The deadline for filing personal income tax returns in Canada is April 30. If you have self-employment income you have until June 15 to file your taxes. The penalty for filing a tax return late is 5% of the balance owing, plus 1% for each full month your return is late, to a maximum of 12 months.

That sounds simple, but many people are afraid to file their income tax return because they expect a big tax liability.; However, you cannot proceed with any solution for unpaid taxes until you know how much CRA taxes you owe.; Not filing at all is not an option as the CRA will not deal with you if you have outstanding unfiled tax returns.

Once your return is filed for each tax year, CRA will issue a Notice of Assessment confirming your taxes for the years filed.; They will add any penalties and interest. If you owe taxes a letter will ask you to either arrange payment or contact the CRA.

To find out how much you owe, we recommend registering for an online CRA account.;

My Spouse Has Passed Away And My Tax Refund Check Was Issued In Both Names How Can I Get This Corrected

Since a joint return was filed, the refund check must be issued jointly. When presenting the check for payment, you may want to include a copy of the death certificate to show you as surviving spouse. You may return the check to the Department and we will include “Surviving Spouse” and “Deceased” next to the respective names on the check. Should you need to return the check, please mail to: NC Department of Revenue, Attn: Customer Service, P O Box 1168, Raleigh NC 27602-1168.

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You Owe Spousal Support

An award for spousal support that is part of a child support order can also result in a tax-refund offset if the payments are overdue.;;

On a related note, if you filed a joint tax return with your spouse and your refund was offset because of debts belonging only to the spouse, you can request your portion of the refund back from the IRS. To make a claim, the taxpayer must file Form 8379: Injured Spouse Allocation.

How Can Community Tax Help Me

If you owe the IRS money and youre looking for ways to settle your debt, let us help. You can work directly with a professional team of tax attorneys, CPAs and enrolled agents who have years of experience helping taxpayers across the country with their income taxes, tax debts and bookkeeping needs. From tax form questions to issues about self-employment tax returns, our team of dedicated tax professionals are prepared to help you settle your tax debt. If you are wondering How much do I owe the IRS? and you dont know where to start, call us today at 1-888-676-4319 and get a FREE consultation about your needs.

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Use A Tax Withholding Estimator

The tax withholding estimator on the Internal Revenue Service website is particularly useful for people with more complex tax situations.

It will ask about factors like your eligibility for child and dependent care tax credits, whether and how much you contribute to a tax-deferred retirement plan or health savings account, and how much federal tax you had withheld from your most recent paycheck.

Based on the answers to your questions, it will tell you your estimated tax obligation for the year, how much you will have paid through withholding by year’s end, and you’re expected overpayment or underpayment.

What To Do After You Find Out

Lets say youve decided on a method to check if you owe taxes. What you should do now is act quickly. You dont want to be on the bad side of the IRS. A problem worth a few thousand dollars can quickly become tens of thousands of dollars if you dont do anything.

Below are possible consequences of not paying the debt owed:

• Taxes and penalties: The IRS can charge you for not paying your balance, other penalties, etc., on a monthly basis until the tax owed is paid in full. This definitely takes a toll on your finances and affect your ability to pay other taxes in the future.
• Wage garnishment: The agency can seize part of your wages each pay period until you make other arrangements to pay your overdue taxes or the full amount is paid.
• Losing a legal right to your property: The IRS doesnt immediately levy your property or assets, but its a possibility. But in severe cases, an IRS levy can assert a secured claim against your assets and permit the legal seizure of your property to satisfy a tax debt.
• Guaranteed damage to your report: Taxes in and of themselves dont impact your personal credit score. However, this information will be shown in public records. This will affect your eligibility for loans, mortgage, or anything that will require you to seek financing from lenders.

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Request A Penalty Abatement To Reduce Your Tax Bill

You may also want to contact the IRS to see if you can have any penalties waived through the first-time penalty abatement program, reasonable cause relief or statutory exception. You may qualify for the first-time penalty abatement program if you have not had penalties assessed to your account for the prior three years, you have filed all tax returns or filed an extension and you have paid or made arrangements for any taxes due.

If you do not qualify for the first-time penalty abatement, you may want to consider penalty relief through a reasonable cause. The IRS will consider your request if you can establish the following reasonable causes:;

• You experienced a fire, casualty, natural disaster or other adverse weather conditions
• You are unable to obtain your financial or tax records
• You or an immediate member of the taxpayers family were impacted by a serious illness or death

Finally, you may also request penalty relief if you received incorrect written advice from the IRS, you may request relief through statutory relief. You will need to file a Form 843, Claim for Refund and Request for Abatement to request for penalty relief. Your form should include the written advice you relied on, the amount of taxes and penalties related to the advice.

What To Do If You Owe The Irs But Cant Pay

Once you figure out how much you owe the IRS, your next step is to figure out what to do about it.

If you have money in your bank account to cover your balance, its as easy as just paying that payoff amount to the IRS.

But what do you do if you dont have the money to pay your taxes owed?

The IRS isnt blind to this problem. They offer solutions for cases like this, which include an installment agreement and Offer in Compromise. Not everyone qualifies for each solution though, so its important to find an available option that can offer you some relief.

If you went with the tax debt relief expert route, theyll be able to walk you through the options available to you and what they would suggest for your unique situation. Our tax pros will even do the heavy lifting to set up a tax resolution that works for you, whether it be a payment plan or an appeal.

If you need back taxes help, reach out for assistance before the tax debt storm comes your way. Liens and garnishment loom on the horizon until you take action to deal with your tax liability. Remember, our tax professionals are only a phone call away.

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Undelivered Federal Tax Refund Checks

Refund checks are mailed to your last known address. If you move without notifying the IRS or the U.S. Postal Service , your refund check may be returned to the IRS.

If you were expecting a federal tax refund and did not receive it, check the IRS’Wheres My Refund page. You’ll need to enter your Social Security number, filing status, and the exact whole dollar amount of your refund. You may be prompted to change your address online.;

You can also to check on the status of your refund. Wait times to speak with a representative can be long. But, you can avoid waiting by using the automated phone system. Follow the message prompts when you call.

If you move, submit a Change of Address – Form 8822 to the IRS; you should also submit a Change of Address to the USPS.

Failing To Pay Estimated Tax

Another common form of falling behind on taxes is linked to business owners and entrepreneurs.

Most people who are self-employed are responsible for paying their own taxes on a quarterly basis, depending on their income and estimated tax payments.

Since they are self-employed, they do not have an employer to withhold taxes from their paycheckthat’s usually an effective backstop for people who might otherwise forget to file their taxes. But if you’re self-employed and you fail to make your estimated tax payments throughout the year, youll incur a large tax liability at the end of the year.

There are a variety of ways to calculate your quarterly estimated tax payments. Just be sure the method you choose doesn’t leave you struggling to make daily expenses or set you up with a huge tax bill and underpayment penalties.

Due to Hurricane Ida, some residents and business owners in Louisiana and parts of Mississippi, New York, Pennsylvania, and New Jersey have been granted;extensions on their deadlines;for filings and payments to the IRS. Most relate to upcoming due dates for quarterly filings and payments.

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Fill Out A Form And Drop It In The Mail

Another option outside of the online portal is to contact the IRS by sending a form through snail mail.

While this is a viable option for any taxpayer, keep in mind that it will take much longer due to the nature of mail. And if you do owe, penalties and interest will continue to accrue while you wait for a response.

Youll also want to make sure the IRS has your current address. If they dont, theyll send their response to the most recent address they have on file, which may not be your current one.

Individual taxpayers who filed a Form 1040, 1040A, or 1040EZ can request an Account Transcript. This transcript will only cover a single tax year and might not include any tax penalties, interest, or additional charges.

If you filed another type of form or are representing a business, youll need to submit Form 4506-T, Request for Transcript of Tax Return. Once the IRS receives and processes your 4506-T form, they will send you a free transcript.

Find A Tax Relief Company That’s Best For You

We’ve weighed the pros and cons of some major players in the space.

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How Can I Check The Status Of My Refund

You can check the status of your refund online by using our Wheres My Refund? web service. In order to view status information, you will be prompted to enter the first social security number listed on your tax return along with the exact amount of your refund shown on line;34 of Form D-400, Individual Income Tax Return. You can also call our toll-free refund inquiry line at 1-877-252-4052, 24 hours a day, 7 days a week. Refund checks are written weekly. If you contact our refund inquiry line and you are advised that your check has not been written, please wait 7 days before calling the refund inquiry line again.

What Types Of Irs Notices Are There

Every year, the IRS sends out more than 200 million notices to taxpayers that serve a variety of purposes. With over 1,000 different types of IRS notices, theres a letter for everything; some may request additional information for a tax filing document, some may seek overdue payment, and some may inform you of an audit on your account. There are two main factions of IRS notice that should never be ignored when it comes to tax debt, and these include: the IRS Statutory Notice of Deficiency, and Final Notice of Intent to Levy.

IRS Statutory Notice of Deficiency: If you receive a CP3219 or LT3219 notice, the IRS is notifying you that you owe additional taxes on a tax return. This may mean theyve performed an audit, your tax return doesnt match taxable income information the IRS has received from other parties, or theyre performing an unfiled return investigation. Before receiving this notice, youve been sent multiple notices explaining any additional taxes the IRS believes you owe. This is essentially your last chance notice. You have 90 days to either protest the additional taxes or pay the tax owed.

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