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5/27/2017

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Paying Your Taxes

April 15 is more than just a random date for people who file their taxes in the United States. It is a date that we either look forward to, whether happily if we are looking to recieve a tax refund, or in dread if we have to pay.

For those who have to pay, the Internal Revenue Service (IRS) expects you to shoulder your tax liability and either file on time or get an extension. The IRS doesn't care how you pay as long as you do it within the designated time frame.

Most people pay their tax obligations on time because payroll taxes are automatically taken out of their income by their employers. This is great for people who work regular jobs because it relieves the stress of having to pay taxes ever quarter or having to come up with large sums of money at tax time.

But people who own small businesses are not always in a position to put money away. It's easy to say that you can send a certain amount of money every quarter to the Internal Revenue Service (IRS), but in reality, it's harder than you might think. This is not meant to make excuses for those who let their tax obligations get behind, but it's a reality for many small business owners.

Although you earn the money and you know that you have to pay at the end of the year, family, bills and other obligations often get in the way. And there is always the idea that you can come up with the money when you need to. For most people, that's not a realistic picture. In reality, most people spend as fast as they earn, especially when the money is left where they can put their hands on it.

Unless you are strong enough to put money away and not touch it, you should hire an accountant to handle your finances. But if you are not making a good profit from your business, you probably can't afford to pay an accountant.

You know you can't get away with not paying your taxes. You know it and you understand the real life ramifications. Eventually you are going to have to pay the piper and when you do, it's going to be a bitter pill to swallow.

The penalties and interest are going to hurt and hurt badly. As stated above, the IRS doesn't care how you pay your taxes as long as they are paid and paid in a timely manner. When you fail to pay your taxes, the IRS will seek remedies to collect that you may not like. At this time, unless you pay your taxes, you don't have much of a say in what happens.

There is one thing you can do that may relieve some of the stess. You can voluntarily go to the IRS and set up a payment plan to pay off your tax burden. This will help you avoid tax liens on your property and protect your credit rating.

The IRS will allow you to pay back taxes over a period of five years. This is a good deal but you will continue to acrue penalties and interest on the remaining balance until it is paid in full.

What you can do:

If you go to the IRS voluntarily and set up a payment plan to pay off your taxes, this will help to protect your property and your credit rating. They will allow you to pay your taxes over a five year period, but keep in mind interest and penalties will continue to accrue.

 

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