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Because of COVID-19 legislation, this tax year is expected to be “a nightmare” for small businesses.
If your business benefited from this legislation, it could be more difficult to stay tax compliant. Some business owners will find themselves owing the IRS.
Tax debt is a serious matter that can have drastic consequences for your business. Keep reading to learn more about how to get out of tax debt if you find yourself owing the IRS this tax season.
Hire a Tax Professional
If you find yourself in tax debt, the first thing you should do is contact a tax professional.
Being in tax debt is overwhelming for anyone. You don’t want this problem to negatively affect your business.
The good news is that you can pay off tax debt and get a fresh start. The first step is consulting a pro.
Tax advisors and consultants dedicate their careers to learning tax law and helping business owners with paying off tax debt. They also stay up to date with the latest developments with the IRS and will have the most current information.
If you find out that you are in tax debt, you need to dig deeper to find out why. In the best-case scenario, there could be a mistake that can be corrected.
Even if you still owe tax debt, you can learn more from understanding what you did wrong and how to avoid making the same mistakes in the future. You need a solid understanding of the issues you are facing before moving ahead.
Settle Your Tax Debt
If you find yourself in tax debt, the best thing you can do is pay what you owe. This is of course if you are able to.
If not, you do have a few options. You may be able to set up an installment agreement or payment plan with the IRS. If you can’t afford this option, you can request to set up a partial payment installment agreement.
If you really can’t afford to pay, you may be able to make an offer in compromise, but you will have to prove this is your only option.
You might also be able to defer the collection of what you owe. If you qualify for special circumstances, you might have more options.
Most business owners aren’t tax experts. If you find yourself in this situation, you need professional guidance.
What if You Don’t Pay?
If you’re in tax debt and don’t pay, you could face a number of penalties including interest and additional fines. You could also face tax liens and levies.
Find Out More About How to Get Out of Tax Debt
Tax debt is an unfortunate reality for many business owners. Even if you think you might have tax debt, it’s important to file your tax return.
Burying your head in the sand won’t make the problem go away.
If you need to know more about how to get out of tax debt, you need a tax professional on your side. Contact us today to learn more about how we can help get you tax debt relief.