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Income Taxes - Do You Owe The Tax Man?

By Edited Jun 7, 2016 0 0
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Have you left your taxes until the last minute every year because you usually owe the government money?

Or worse yet, did you not even bother filing your income tax return? (Don't laugh, I have friends who don't bother!) It may take a while, but they will find you! It is better to come clean now, than down the road as the fines accumulate.

I was helping my daughter last year with her income tax. I had purchased one of those computer tax programs, and thought it was great. Everyone else in the family was going to get a few dollars back except my daughter.

She was really upset as she owed $900.00 and she didn't have it. So, she thought about not filing it. I told her, they have a copy of all of the information slips that you get from your employer, and will track you down and fine you.. So, she then tells me, that she just does not have the money to pay them.

I told her to phone them BEFORE the taxes are due, and explain to them, that for various reasons, you just don't have the money right now to pay them. She didn't want to, she had visions of them garnishing her paycheck at work.

She was half expecting to be yelled at, but instead she got a friendly tax person (sometimes you get lucky and get a friendly one!) who explained to her, that they were happy she had phoned before they were due, and therefore they were willing to come up with a payment plan. If you wait until the last minute, you are going to get frazzled tax people. So, if you know ahead of the date, then deal with it now.

They worked out a monthly plan, that she promised to do, and they told her that there would be an interest charge, but if she didn't falter on any of the payments, or she was able to pay it up quicker, that they would refund the interest. She was very relieved, and she made sure that was her first bill paid every month!

Now this is a totally different situation than what another relative of mine got. She got a nasty bunch of fines on top of what she owed them, and then the promise of an audit.. all because she was late submitting her taxes, and she owed money and just didn't bother to send any. She figured she would just get a bill in the mail.. she did get a bill in the mail alright! It took them 3 months, but then she got this bill for the taxes she owed plus a few hundred dollars in fines.

When she ignored that, they started taking her credits she was entitled to from other government agencies. She finally relented and phone them, and they finally worked out a plan.

So, as much as none of us like to deal with our taxes and or taxes due, it is one of those necessary evils that must be done. If you owe money, don't hide your head in the sand, and pretend it will go away. This is the government we are talking about, and they will find you.. sometimes it is months later, but they will! So, phone them up, just like you would any other creditor, and tell them the truth, BEFORE your taxes are due, and they will set up a plan.

They want the money you owe them, and if they think they will get it with a payment plan then they will. But if you ignore them, and ignore them for months, without so much as a phone call, they will start tacking on fines and find other monies you may be entitled to and take them.

So, just call them, and then tell your employer to take a bit more tax off your pays, if you are ending up in this position of having to pay large amounts that you can't afford.

You don't want to be one of those red flags that shows up in the tax man's office.

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