Combating back taxes with a CPA
There are few worse feelings than undergoing a tax audit knowing that you owe back taxes to the Internal Revenue Service (IRS). Failing to repay unpaid taxes from previous years can quickly accumulate heavy interest fees and impact your ability to borrow money, among other negative impacts. With the help of a certified public accountant (CPA), however, you can be well on your way to repaying your debt and minimizing potential damages.
The dangers of back taxes
Regardless of who you are, failing to pay taxes will ultimately hurt you more than Uncle Sam. Just like a loan, accumulating unpaid debt can negatively impact your ability to borrow money from banks and private lenders. However, decreased borrowing ability and a lower credit score are not the only penalties that come with unpaid taxes.
– No tax rebate: failing to file a tax return or pay unpaid taxes can make you ineligible for a tax rebate.
– Reduced Social Security benefits: self-employed taxpayers who don’t pay taxes in the first place won’t be contributing to the Social Security program, potentially reducing state income after retirement.
– Increased interest rates and penalties: much like loans, unpaid taxes are subject to interest and late fees. Over time, these can turn a small amount of back taxes into an almost insurmountable debt.
By repaying back taxes as soon as possible, you can avoid these harsh penalties. Regardless of whether or not you’re in debt to the government, however, hiring a CPA to help with tax preparation will ensure you remain in good standing with the IRS.
How a CPA can help
CPAs offer a number of tax services that can help ensure that you pay your taxes on time and avoid penalties. Even if you currently owe unpaid taxes, CPAs can help minimize the damages and get you out of debt quickly and efficiently.