The majority of people who run into tax trouble with the IRS are those who are required to file and pay quarterly taxes. While the reasons for falling behind on your taxes are many, the result is the same: garnishments, audits, penalties and interest, not to mention, worry, stress, and lost sleep.
According to a recent tax article on Bankrate.com, the following are the top reasons why many Arizona residents and small business owners fall behind on their taxes.
Understanding them may help many Arizonans keep tax bills current and the IRS off your back:
Not knowing your filing requirements
Most people pay their taxes in even payments throughout the year through paycheck withholding. But if you’re self-employed or receive a cash windfall, interest, dividends, alimony, rental income, or any otherwise unreported income, it is your responsibility to get the IRS its share by filing quarterly tax form 1040-ES.
Not keeping up with quarterly tax payments
Estimated payments are due on the 15th of April, June, September and January every year. Since most Americans dread doing their taxes only once a year, it’s no surprise that many people fall behind on their quarterly payments. But we all know that once you fall behind, it’s even harder to catch up. If you’ve already fallen behind, please call our law firm for help with IRS tax relief right away.
Being confused about what needs to be claimed on quarterly taxes
Estimated tax payments are expected from anyone who receives any income that is not subject to withholding. Many people can become easily confused about whether or not they should be filing quarterly taxes, especially if they receive a one-time cash windfall or earn income from several different taxable sources throughout the year. It’s important to consult with a qualified tax professional any time you are unsure of your tax obligations.
Thinking you can “catch up” later
If the extra income is a cash windfall like an inheritance, lottery win, or a generous gift, many people get excited and spend all the money right away without withholding any taxes. People in this category may not even realize they need to report this income to the IRS – but rest assured the IRS knows and will find out if you don’t.
Another common problem is when small business owners or self-employed people run into cash flow problems and feel they “just can’t” pay their taxes on the quarterly schedule. They tell themselves they will make it all up come April 15th – but cash isn’t usually any less tight in April, either. And if you underpay by $1000 or more you will be subject to penalties and interest for not paying as you earn.
If you have a problem paying taxes to the IRS, contact an experienced tax relief attorney right away
At the Pew Law Center we understand that tax problems with the IRS can be very overwhelming. Whether you owe back taxes, haven’t filed taxes for several years, or have received an audit or wage garnishment notice from the IRS, the attorneys at The Pew Law Center can help you or your business with these and any other federal and state tax problems.
We are a dedicated debt relief law firm. We help people work through tough tax problems or file for bankruptcy every day. We can help stop the debt cycle and give you relief from your overwhelming, burdensome, and crushing tax problems. Please don’t wait another moment. Contact us Now and our phoenix bankruptcy attorneys will help get you the fresh start you deserve.