If you think you owe the IRS, you aren’t alone, there are currently over 900,000 delinquent accounts in the country. If you know how to find out how much you owe the IRS, you’ll be able to stay ahead and avoid any surprising debts.
Whether you have a large debt you are looking to manage or you just want to be sure there’s no pending payment owed, read on to learn more about checking your unpaid tax debt.
How to Find Out How Much You Owe the IRS
If you feel there’s a chance you’re behind on your taxes, it’s best not to keep your head in the sand. The truth is the IRS will only be reaching out to you once things have become a real problem, and the idea is to stay on top of your payments so you don’t end up with a mess on your hands.
The good news is you have some fast and easy ways to find out exactly how much you owe so you can handle any outstanding payments.
Going online is by far the fastest way to find out how much you owe to the IRS. In fact, the IRS has even created an easy to use tool to help you do just that.
Not only will the tool show you any payments you owe, but it will also show all payments that have been made in the last 18 months. If you’ve made a recent payment and don’t see it appearing on the site, don’t worry. It typically takes one to three weeks for payment to appear on the tool
Calling the IRS directly is another way to find out how much you owe, however, it’s important to remember to call within operating hours. Currently, the hours to call are:
Monday-Friday from 7 a.m – 7 p.m local time
You can reach the IRS by calling 1-800-829-1040, however, if you are calling on behalf of a business dial 1-800-829-4933.
Be sure to have your social security number and any other important documents on hand when calling.
While it’s difficult (and time-consuming) to directly mail the IRS to find out your owed balance, you may be mailed a notice by the IRS. In the event that you receive a notice, you’ll find the owed balance is included there.
It’s important to remember that the IRS will usually only send notices corresponding to a specific year. This means you may still owe more than the balance stated if the additional debt took place in a different year.
What Will I Need?
While finding out how much you owe, you’ll want to gather the right materials and take the right steps to ensure there is no error or to see if there is any additional amount you may owe.
The last thing you want is to be hit with an added bill when you thought you were all caught up. We suggest the following steps for ensuring you are paying the right amount:
Copies of All Taxes Owed
If you have access to all of your prior tax returns, this is a good time to gather them. Take note of the amount owed in each year and begin to tally it up. You should be looking at copies of returns as well.
If you paid your taxes but don’t have the receipts on hand, contact your tax accountant and request copies from them.
Filing Past-Due Returns
In some cases, what you owe is a matter of backed returns. This can be a bit messy as you will have to use the forms for the corresponding year.
For example, if you are filing backed taxes from several years ago, you’ll have to use the return forms that were used in the year you are filing for, not the forms that are used today. Fortunately, you can find many of these forms online or through a tax software program.
Know Your Interest and Penalties
While looking at old receipts is a smart way to be sure you aren’t missing anything, keep in mind that this amount does not include any additional interest fees or penalties.
The cost of interest and penalties will vary depending on how long you’ve been owing on your taxes. It’s best to consult with a tax accountant or attorney in this area to get a better idea of the full amount.
Create a Payment Plan
Now that you’ve reviewed the damage, it’s time to take action. Many people aren’t aware that the IRS is actually willing to make plans with you to help you pay off your debt. Like any payment collection organization, they just want to know they’ll be getting their money.
Once you make your first initial payment it will be easier to create and adhere to a set payment plan. Here are some ways to start paying off your tax debt:
Contact the IRS, or have your tax accountant contact the IRS on your behalf and request an installment agreement. They may require you send over some additional documentation such as your payroll receipts or bank statements to prove you are unable to pay the full amount.
From here, it will be easier to have an installment agreement created.
Offer in Compromise
Some taxpayers are eligible for an offer in compromise, which means you won’t be required to pay the full amount. Again, they would rather receive some of their money than none of it. However, there are specific requirements to prove that you are unable to pay the full amount.
For example, you may have to show that your home, car or belongings are not worth the value of your owed taxes, proving that in no circumstance could you pay the remaining amount.
Speak with a Tax Attorney
When in doubt, speak to a professional. Tax attorneys know what options you can take when it comes to owed or back taxes, they will also know which paperwork is required to get it all resolved.
It’s the preferred choice over falling any deeper into debt.
Taking the Next Step
Knowing how to find out how much you owe the IRS is a substantial and necessary step towards clearing your debt. Next, it’s time to find the help you need to set up payment plans or apply for an offer in compromise.
If you need assistance with your owed taxes, contact us today to learn more about how we can help you.