Do You Owe the IRS a 1040 Balance? Avoid These Mistakes

In a perfect world, every tax return would result in a refund, or, at a minimum, a balance of zero. Life isn’t perfect, however, and many people find themselves paying the IRS every April. Paying your balance doesn’t have to be a nightmare, but it can be if you make these rookie mistakes:

Ignoring the Balance — And Failing to File the Annual Return

Ignoring your tax issues won’t make them go away — and in the long run, this approach could lead to some truly terrible repercussions. Try your best to file your return on time, regardless of your ability to pay. If you can’t complete your return by the due date, file for an extension.

Assuming That a Tax Filing Extension Applies to Payment

It’s shockingly easy to obtain a tax filing extension with the IRS. Simply complete IRS Form 4868 — you’ll almost assuredly be granted an automatic extension of six months. Unfortunately, this extension merely applies to filing your tax return. Whether or not you’re allowed to file late, the IRS expects you to pay on time.

Not Seeking an Installment Plan

If you’re absolutely incapable of covering your tax bill at the time it’s due, you may be able to pay down your balance over the course of several months. The IRS offers a variety of installment plans that make it easier to handle the burden of tax debt. Begin the installment application process as soon as you determine that you will be unable to pay on time.

Negotiating With the IRS Alone

While it’s possible to negotiate with the IRS on your own, this approach is not always advisable — particularly if you owe a large balance or struggle to advocate for yourself assertively. In most situations, it’s better to allow an expert to advocate on your behalf. This person may be able to secure a more favorable resolution than you could on your own.

The Highland Tax Group can help you avoid the aforementioned rookie tax mistakes. Call 720-398-6088 at your earliest convenience to get started.