When you’re self-employed or an independent contractor, you work hard for every dollar. The payback is the ability to pursue work you’re passionate about and freedom from the constraints of working for someone else.
But that freedom comes with the added burden of navigating the bureaucracy of the IRS and state tax systems and keeping up with estimated tax payments. When you’re working hard to do it right, it can be frustrating to be faced with tax penalties or debt. It’s not too late. We can provide the tax debt help you need now.
When you’re self-employed or an independent contractor, you have to think about taxes all year—and make all your tax payments yourself, including:
Many self-employed people aren’t aware of all the requirements for ensuring their taxes are filed and paid on time.
When you are paid as a self-employed person or independent contractor, the person or business that pays you typically also reports the payment. You’ll receive a form 1099 that shows that your income was reported. If the amount of the income is enough to file a tax return but the IRS doesn’t get one from you, they file a Substitute for Return.
For self-employed people, fear of being involved in IRS collections is real. The IRS will take steps to collect your tax debt, including:
Even if you are several years behind, it’s important to start where you are. Often, it helps to begin with your current tax year and work backward to file your previous years’ returns.
The IRS doesn’t take the time to consider factors that may be advantageous to you such as itemized deductions, a special filing status, or a Child Tax Credit. As a result, the Substitute for Return often results in a higher tax liability for you.
In addition, the IRS will apply late payment and filing penalties that can be as high as 25% of your liability. Then they add interest that is compounded daily. Soon, your tax debt can be out of control.
You’re not the only self-employed person who owes back taxes—and help is available. A qualified tax professional can help you understand your situation and provide a realistic assessment of the options available to you. Your tax professional can work with you to determine whether you qualify for solutions such as:
In addition, once you are caught up on your tax filings, you may qualify for a penalty abatement.
When pursuing any of these options, it’s important to stay on top of the IRS processes and procedures. Don’t miss your opportunity for a collections due process hearing, collections appeals process requests, and due consideration of other requests that you submit.
We’ve worked with tax authorities for over 30 years.
We know what to do, who to contact, and how to get things resolved.
For over three decades people have turned to TaxAudit when they have tax issues. We speak the language of the IRS and state tax authorities, we understand their processes, and we implement solutions through a proven approach that gets results.
Because we know what it will take to resolve your issue, we provide a fixed-price quote so that you can get your finances back on track. No surprises.
We have tax debt relief down to a science. Let us help you find the solution that works for you.