Do You Have Tax Debt?

May 10, 2013

Do you currently have tax debt? For most of the American population, tax debt just isn’t in their vocabulary because they set themselves up to receive a huge tax return. Even though they might have 3 or 4 dependents, they still decide to claim zero and pay in extra money every out of every paycheck. While I understand that it feels nice to receive a lump sum of money from the government when tax time comes around, it just doesn’t make sense to give the government free money for an entire year.

There are still others, however, that claim an incredibly high number, even though they may have very few dependents. They feel that they need every single cent to survive, but when April comes around, they are in severe trouble. Instead of getting money back like most Americans, these individuals will be paying in thousands of dollars. It goes without saying that this is a terrible position to be in, especially when you don’t have the money to pay the government.

Finally, perhaps you own a business of your own and you make non-taxed money each month. If you do not pay in the appropriate amount of money to the government quarterly, you might owe thousands of dollars to the IRS when your taxes are due.

So What Do You Do?

Regardless of how you got in your situation, you are still in a world of trouble. The short of it is that the government needs more money from you and you don’t have it. What can you possibly do?  When a company deals with tax situations all the time, they’ll definitely know more about how to handle your situation better than you. Plus, you can be assured that your taxes get paid correctly and on time. After all, you know that you don’t want the IRS knocking on your door!

Plan For The Future

If this happens to you this year, there’s absolutely no reason why it should happen to you next year. If you have a business, head to your accountant and show him your earnings over the past couple of years. He can pretty accurately show you the amount that you’ll need to pay in per quarter so you won’t be in that same situation again. The same is true for you that claim too many dependents. Rather than owing in a bunch of money at the end of the year, take your number down a bit. If it was 8 last year and you ended up owing a couple thousand bucks, perhaps you should claim 5 or 6 instead.

Finally, it’s always a good idea to have a reserve amount stashed away, just in case the government felt like they didn’t get enough of you money. If you have a couple grand sitting in an account at the end of the year, you’ll have no problem paying that tax bill should it come. And, if it doesn’t, then you’ve got two grand to do whatever you want with!