Millions of Americans were able to get their tax forms and payments sent into the Internal Revenue Service last month, but many more were unable to do so for a variety of reasons. Unfortunately for those people, they cannot simply figure they'll pay next year and that will be the end of it, because the IRS is often aggressive in pursuing these outstanding balances.
In the last two fiscal years alone, the IRS has sought out people who owed a combined $30 billion in back taxes, and other funds that were owed as a result of consumers missing the deadline, according to a report from Bloomberg Businessweek. That includes penalties and interest accrued over the time during which those taxes were owed after April 15.
"The amount you owe will only grow larger if you procrastinate," Mary Kay Foss, an accountant with Sweeney Kovar, told the news agency. "If you ignore your tax bill entirely, not only will interest and penalties accrue, but the IRS may go after your assets and wages as well."
What can be done to save money?
The biggest mistake many Americans make is not paying their tax bills if they can't afford to do so, the report said. That's because those who don't file at all are hit with a penalty of $195 per month, and that adds up quickly on top of interest and other penalties. Often, because these balances aren't always detected right away, $1,000 or more can be tacked onto a liability before the consumer hears from the IRS. Those who worry about coming up short should send the IRS as much as they can at first, and then try to work out a payment plan later on. This is, in fact, quite common.
Finally, consumers should also try to work with a tax professional not only in the few months leading up to the filing deadline, but also over the course of the year. Doing so might allow them to keep closer tabs on what they might end up having to owe, and therefore more ably prepare to pay that amount as soon as possible and avoid running afoul of the IRS.
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