State Back Tax Settlement
If you have State taxes owed that are coming up on their expiration date for refund collection it may be in your best interest to take this return information to a tax professional to help you get all the appropriate exemptions and credits so that you can limit what you owe for that year.
Every time you have state taxes with a refund there are no penalties to draw on and therefore you don't have to worry about paying fines.
Each time you file on time, you want to be meticulous and try to get a refund or break even so that you don't incur any additional debt. Tax professionals will also know all of the little tricks to your state tax filing that can help you get the most benefit out of your returns.
Paying any state taxes owed as timely as you can will decrease future penalties and interest that you could be charged by your state tax authority.
Having to come to some kind of state back tax settlement varies from each of the different fifty states. Actually only 41 states collect resident individual income taxes, 35 of which base their system on your federal tax return.
Know what to do when you have state owed back taxes. All of the regular resources, specifically your tax professional and the US government that issue the taxes are your best bet to help settle any state tax debt.
Of course to file state back taxes you need to locate or request copies of your tax information as well as the prior years state tax forms.
Finding tax forms from your job (W-2, 1099) or jobs may require some digging. our state website will have information for its department of revenue detailing whether or not they have the forms online for print or efile.
From your state department of revenue you can find out what the deadlines are for any back taxes and particularly what penalties can be incurred. The three year deadline to collect IRS back tax refunds that the IRS practices is often the same practice used with the states.
If you have state taxes owed that are getting close to the expiration date for refund eligibility, file that year first so you can capitalize on your refund. In the event you're due a refund, then there are no penalties owed.
It's best to file all of your subsequent state taxes at the same time, however in different different packages so as to minimize the chance for clerical error and avoid the likelihood of an audit.
If you should have both a refund and a debt and it is not automatically held, use the former to pay the latter, by all means use the refund to pay off the debt as quickly as possible.
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