I work with all kinds of people who have tax troubles of one kind or another.
I most often see people who haven’t paid their taxes, or people
who have not filed returns.
I also work with small business owners who have payroll tax obligations.
Small business owners often find themselves in a bind. On payday they
often find themselves in a cash flow squeeze. They don’t have enough
cash to pay their employees and also pay the payroll tax. So of course
they pay their employees who will walk if they don’t get paid. Over
time, this can result in a huge backlog of payroll tax owed. Eventually
the taxman comes knocking. I help small business owners deal with the
taxman and set up proper withholding and payroll to avoid having the problem
come back to haunt them again.
What Happens If You Don’t File Federal Income Taxes For More Than A Year?
Employees receive a W-2 every year from their employer. The IRS gets a
copy of the W-2 and knows whether a return has been filed or not. If a
return is not filed, the IRS will eventually send a notice demanding that
a return or returns be filed.
If you ignore the notice, the IRS files a return for you. When that happens,
everything on that return is in the IRS’s favor. They take the fewest
possible exemptions. They take the standard deduction, so the taxpayer
loses any itemized deduction he or she would be entitled to if they filed.
As a result, the tax you will owe is based on their return and it will
be the highest possible amount.
If you file a return yourself, you’ll pay less tax. Unfortunately,
by the time you get to that point, the interest and late filing penalties
have piled up, but filing your tax return even if it’s late, and
even if you don’t have the means to pay, can save you money!
For more information, a free initial consultation is your next best step. Get the information
and legal answers you need by calling
(510) 444-4430 today.