Category:Debt Advice

Tax Debt Advice

Tax debt is the total unpaid amount due for tax, penalties and interest.

The tax tiger requires us to pay tax as-you-go. Most of us do. For various and a myriad of reasons, some people get behind. A good example is when too little tax is withheld from paychecks, and too little funds are available when a balance due tax return is filed. Tax debt can arise for non-payment of income tax, payroll tax, or excise tax. Each unpaid amount is subject to penalty and interest.

Root causes for tax debt are poor record-keeping, under-reporting of income, and late payment of tax. Insufficient tax withholdings, failure to timely file, failure to deposit or make estimated payments [or any combination of these] can create tax debts. Together with accruing penalty and interest charges, tax debt can mushroom into unmanageable proportion if not checked early-on.

The important thing to remember about tax debt is that you are accountable. You must tackle the problem, either alone or with professional assistance. To resolve tax debt, ask yourself relevant questions … do I really owe it, how do I report, what record do I need, do I have it, where do I find it, can I trust the tiger, who can I ask for help, how much does professional help cost, can I afford it?