What happens if you don’t pay your taxes? | Molen & Associates Tax Tips

Stay Ahead of Law Changes & Protect Yourself Against Being Audited: Corporate Transparency Act and Reasonable Compensation

What happens if you don’t pay your taxes?

At some point everybody wonders what what will happen if they don’t pay their taxes. There are always consequences in society when rules and laws are broken. These consequences exercise justice and help society stay in order. So, what happens if you don’t pay your taxes?

The Consequences

First, the IRS will penalize you for failing to completely pay off your taxes. The IRS will charge you this penalty in addition to a fee of 0.5% of the amount of money owed and will continue to do so every month until the debt is paid in full, up to 25% maximum. In addition, you will also be charged interest. The IRS announced that interest rates will increase for the first quarter of the year 2019. The 2019 first quarter interest rates 6% for underpayments, and 8% for large corporate underpayments. Penalties and interest charges stop increasing as soon as the balance is paid in full.

What to do if You Can’t Fully Pay Your Taxes

If it is impossible to fully pay off your taxes, you should still respond to the IRS and pay as much as you can. They will help you to arrange a tax payment plan with them at a lower total cost. Failure to make arrangements with the IRS will result in more severe consequences on top of the penalties and interest rates mentioned earlier. The IRS may place a Federal tax lien on your house, car, boat, RV, or take money out of your checking account. A Federal tax lien is a legal claim that states if you sell your property, the money that is made will be used to pay off your debt before you receive any of it. This will make it nearly impossible to take out a mortgage on your home and the tax lien will stay on your credit report for seven years.

Paying Larger Penalties

If continue to not pay your taxes you could pay larger penalties, lose your passport, the government may seize your property, or you could end up in court. In the end filing for your taxes and making efforts to pay them off is always the best option. It may be difficult, but it will help avoid future problems that will be more serious and harder to resolve.

Rachel Morris

The Molen & Associates Difference

Mike Forsyth

“Super helpful and timely. This is our first year with them and we look forward to trusting them with our taxes and business books for years to come.”

Caitlin Daulong

“Molen & Associates is amazing! They run an incredibly streamlined process, which makes filing taxes a breeze. So impressed with their attention to detail, organization, and swift execution every year. Cannot recommend them enough!”

Sy Sahrai

“I’ve been with Mr. Molen’s company for few years and I felt treated like family respect and dignity. They are caring, professional and honest, which hard to find these days. Love working with them.”

Charitable Planning: A Strategic Approach to Philanthropy and Tax Benefits

Charitable Planning: A Strategic Approach to Philanthropy and Tax Benefits In the realm of financial planning, charitable planning stands out as a multifaceted strategy that not only furthers philanthropic goals but also offers significant tax advantages. This article...

Maximizing Tax Benefits through Strategic Business Vehicle Usage

Maximizing Tax Benefits through Strategic Business Vehicle Usage In the realm of business operations, the utilization of vehicles plays a pivotal role in ensuring efficiency and effectiveness in service delivery, client engagement, and overall operational logistics....

Understanding the 529 Savings Plan: A Comprehensive Guide

Understanding the 529 Savings Plan: A Comprehensive Guide In the realm of education financing, the 529 Savings Plan stands out as a pivotal tool for families and individuals aiming to manage the rising costs of education. This article delves into the intricacies of...

Tax Scams and Fraud: Navigating the Maze of Tax Scams and Fraud Awareness

Stay Alert: Navigating the Maze of Tax Scams and Fraud Awareness In an era where digital convenience meets sophisticated cyber threats, tax scams have emerged as a significant concern for taxpayers. The Internal Revenue Service (IRS) continuously warns the public...

Navigating the World of Business Expense Deductions: A Comprehensive Guide for Small Businesses

Navigating the World of Business Expense Deductions: A Comprehensive Guide for Small Businesses In the dynamic landscape of small business operations, understanding the nuances of business expense deductions can significantly impact your financial health and tax...

Unlocking the Benefits of Charitable Contributions: A Guide to Maximizing Your Tax Advantages

Unlocking the Benefits of Charitable Contributions: A Guide to Maximizing Your Tax Advantages In the realm of personal finance and tax planning, charitable contributions emerge as a powerful tool not only for supporting causes close to your heart but also for...

Detailed Guide on Cryptocurrency Taxation and Reporting

Detailed Guide on Cryptocurrency Taxation and Reporting  In the United States, the Internal Revenue Service (IRS) has clear guidelines on the taxation of cryptocurrency, which is considered property for tax purposes. This classification has significant implications...

Gig Economy Taxation: a Detailed Overview

Gig Economy Taxation: a Detailed Overview Reporting Income as a Gig Worker Gig economy workers must report all income earned from their endeavors. This includes, but is not limited to: Earnings from part-time, temporary, or side gigs. Income not reported on...

Standard Deduction vs. Itemizing: A Comprehensive Guide for Small Business Owners and Self-Employed Individuals

Standard Deduction vs. Itemizing: A Comprehensive Guide for Small Business Owners and Self-Employed Individuals   As tax season approaches, one of the most significant decisions you’ll face as a small business owner or self-employed individual is whether to take...

Real Estate and Taxes: A Comprehensive Guide

Real Estate and Taxes: A Comprehensive Guide Real estate taxation is a multifaceted topic that encompasses various forms of taxes, including income tax, property tax, and sometimes even sales tax. Whether you’re dealing with personal or business real estate,...

Request an Appointment Today

15 + 1 =

Call us at

Pin It on Pinterest

Share This