Pay Off Back Taxes This Year: Here’s Why

Pay Off Back Taxes This Year: Here’s Why

Why should you pay off back taxes today? We're glad you asked!

According to the IRS, more than 13.2 million Americans owe back taxes. The majority of these cases involve amounts that seem impossible to pay off.

That leaves those tax-owing Americans in a difficult position. They want to pay, but they can't, and the end result is feeling a lot of guilt about the situation.  There is no easy way to get out of paying your back taxes. Uncle Sam wants his money, and he'll get it somehow.

There are steps you can take to find a solution and make 2020 the year you finally deal with your taxes.

Note, we always recommend getting in touch with a specialized Tax Resolution Professional to negotiate with the IRS on your behalf. If you’d like to schedule a no-cost confidential tax relief consultation, contact us here. www.blackhawktaxsolutions.com

Why You Should Pay Off Back Taxes This Year:

#1 You'll End Up Owing Less

The longer you wait to pay your back taxes, the more you are going to end up owing. That's because the IRS can and will add penalties that run up to 50% of the tax bill. That can add up quickly. The longer you drag out the situation, the more you'll need to pay your tax resolution specialist to help you handle everything. The sooner you act, the sooner you can resolve the issue and the less you'll have to pay.

If you need help from a CPA, enrolled agent or a lawyer who is also a tax resolution professional, look for someone that will charge you a flat fee rather than an hourly rate. Some cases take longer to resolve, so it’s important to know up front what you’ll be paying in service fees to get your back tax issue resolved.

#2 Housing prices are at an all time high. Time to cash in?

If you own your home or have equity in it, selling it and downsizing may be the best way to settle your tax debt and get a clean slate. Now is a perfect time, too, with housing prices at a premium in many areas of the country. You can use that cash in the bank to settle your back taxes almost immediately. Additionally, if your home is worth more than you owe, you can then reinvest that money or save it for a rainy day. That gives you a clean financial slate to start rebuilding your life.

#3 Economic Uncertainty

Most experts agree we’re due for a recession soon. How soon? Well, no one knows. What we do know is that having a large back tax bill will only hinder your ability to weather a storm in the event of an economic downturn.

You might be able to take a low interest loan out now that the economy is still good and settle your tax bill. Taking care of your taxes while the economy is still good will give you peace of mind and breathing room in case things go south with the economy.

Don't let the burden of back taxes hang over your head any longer. Discover how to solve your tax problem by speaking with our tax relief professionals: www.blackhawktaxsolutions.com

Blackhawk Tax Solutions, LLC

(719) 694-5505

lauren@blackhawktaxsolutions.com


Filing Taxes? 4 Mistakes to Avoid.

Filing Taxes? 4 Mistakes to Avoid.

It can be a stressful experience preparing your taxes and filing them. It can be even more stressful however, if you make these mistakes that land you into tax trouble. It's important to remember that if you make mistakes that are serious enough, you might end up triggering an audit of your tax return or owe more in back taxes.

It’s early to be talking about tax season, but if you're planning on filing your own taxes this year, here are four mistakes that you should avoid.

Don't neglect to report all your income

Whatever your sources of income may be, whether it's your regular paycheck, a side gig, gains that you've made on the stock market, or interest that you've earned from deposits in the bank, it's important to remember that you should account for all of it in your tax return. If you don't, the IRS may come looking for it.

Every time you make at least $600 in income working as an employee of any description, you get a 1099 form stating what you've made. The IRS gets a copy of the form, as well. This means that it makes no sense to try to hide your income from the IRS.

When you make any kind of income, you should report it on your tax return. Technically, you should even record smaller chunks of income, the kind for which you don't get 1099 forms.

Don't just guess at what your deductions are

There are many possible tax deductions that you could take advantage of. It's important to remember, however, that you do need to back up every attempt at a deduction with documentary proof like receipts or logs. If you attempt a rough estimate at what your deductions should be, you could trigger suspicion, especially if the sum that you claim is high for your income level, or if it is a convenient round figure.

Don't automatically reject the idea of itemizing

Most tax filers choose to take the standard deduction, rather than itemize. This doesn't mean that you shouldn't itemize. It depends on your specific circumstances. If you have many legitimate deductions to make, say, because, you pay a great deal of mortgage interest, you might be better off itemizing, even if it takes more work to do it.

Don't put off filing your taxes

Preparing your taxes is a complex process. If you're self-employed, or if you need to itemize, it can only get worse. It's important to not rush through the process. Any mistakes that you make may prove costly. Take out the time to file your taxes well ahead of the tax deadline. If you need extra time, you can always file for an extension. This way, you can avoid the late filing penalty, which can add up to a whopping 25% of the original tax amount

Making a mistake on your tax return is the last thing you want to do. Mistakes can be complicated to correct and recover from. It's important to give yourself enough time.

Whatever you do, don’t skip filing. Many clients come to us with not only years of unfiled tax returns but owing large sums of money to the IRS.  Many times we can help you obtain a “fresh start’ settlement for up to 85% off the original amount owed, including penalties and interest, if you qualify.

If you do run into tax trouble, reach out to our tax resolution firm and we’ll schedule a free, no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem.

Blackhawk Tax Solutions, LLC

(719) 694-5505

blackhawktaxsolutions.com