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WHAT HAPPENS IF YOU DON'T PAY YOUR INCOME TAX?

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WHAT HAPPENS IF YOU DON'T PAY YOUR INCOME TAX?

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  1. WHAT HAPPENS IF YOU DON'T PAY YOUR INCOME TAX? What if you are late to file your tax returns and pay the set amount? This shouldn’t happen. You have to pay income taxes appropriately throughout the year, in order to avoid paying a huge sum at the financial year-end. Employees pay income tax according to their paychecks. Self-employed taxpayers pay the taxes suggested by the IRS and it is wise to pay your taxes quarterly if you are self-employed. However, certain situations in life are unpredictable and can stop you from preparing your annual returns. So when you find income tax preparation near you, you probably won't be late filing your returns. Let's discuss what happens when you don't pay the income tax before the deadline. What Can Happen When You Don’t Pay or Pay the Income Tax Late? If you don’t pay the income tax or fail to pay by the due date, you’ll start acquiring penalties and interest on the outstanding payment. The interest rate of failing to pay the income tax is 3%, further compounded after the due date. Whether you apply or not for the extension for filing your returns, you have to pay the penalties and interest rate. Failing to pay the penalty charge is charged at a 0.5% rate of the outstanding amount until the amount due is paid. In addition, failure-to-pay and failure-to-file charges will be applicable if you don't file tax returns and fail to pay the tax liability.

  2. After continuous non-payment, the government will issue a letter for your unpaid tax amount. If you don’t respond to this letter, the IRS has the right to acquire your personal assets. If the outstanding amount isn’t cleared within some months, the IRS may send a legal levy, which means legal seizure of your assets. You may face criminal charges and in extreme conditions, you may have to go to jail. Your jail sentence can be up to five years for tax evasion. Criminal charges are typically only filed in extreme conditions, however to avoid going through that process ,find income tax preparation near you and pay your tax earnestly. Some Easy Ways to Pay Your Taxes Applying for the installment agreement Apply for the installment agreement if you’ve realized you can’t pay the taxes for a longer period. You can apply for this agreement through the IRS official website. This agreement stops you from facing the enforced collection action. You still have to pay the interests and penalties, but the IRS won’t take legal actions against you through monthly payments.

  3. Try to avoid the late fee The late fee amount increases the later you pay the taxes. However, the more you make timely payments; you face fewer interests and penalties. Clear the late fee before filing the return or send the penalties on time using Form 1040-V. Final Thoughts Please try to pay the taxes on time, don't ignore this. The IRS has the full authority to seize all your assets and settle the debt. If you don't pay taxes, it will freeze up your bank accounts, and your assets will be seized. If you’re unable to pay your tax liabilities, reach out to us here at Lincoln Tax Services today. Our professionals will find potential solutions and provide the best possible assistance. We are on your side when dealing with the complexities the IRS brings. Get In Touch 1575 Lawrenceville Highway, Suite K Lawrenceville, GA 30044 Website: https://lincolntaxservices.com/ Email:Info@LincolnTaxServices.Com Phone: 770-736-1400

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