Back taxes

Back taxes are taxes that have not been paid from a past year or since the last pay period. This applies to taxpayers who have completely missed the previous pay period and those who have issued incomplete payments. This also applies to those who have not declared their income correctly and have been discovered to have a higher taxable income. In such a situation, it does not matter whether the misdeclaration was deliberately done or occurred as an honest mistake. The amount owed must still be settled, and any amount that is not paid on time results in back taxes.

Since back taxes incur interest and continued delinquency accumulates penalties for the taxpayer, this can compound into a big problem for taxpayers who may not have the funds to settle their obligations. In that event of this, the taxpayer may ask for a more manageable settlement scheme. In such a case, it may be possible for the state to provide some kind of tax relief.

Tax relief involves the reduction or removal of the obligation to pay certain taxes. Such write-offs or deductions may be granted to individuals or small businesses who may be undergoing serious financial difficulty or may be in need of some assistance. Individuals or companies wishing to take advantage of tax relief programs will likely be required to meet certain criteria in order to avail them. They may be issued specifically to people who have been hit by a calamity, or may also be granted to people belonging to a certain minority group. Tax relief may be particularly helpful to those who have accumulated much debt in the form of back taxes and are requesting for payment options from the IRS.

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