Recently, pop star Iggy Azalea discovered (the hard way) that even though you might an iconic pop star, you still have to pay your fair share of taxes on earnings.
Can this happen to you?
Sure it can -- anytime your tax position changes due to a change in income status, regardless of how much, you should always meet with your tax accountant to ensure the withholding amounts.
Let's presume you decide to live your dream as an entreprenur and are now self-employed after years of being an employee. Your withholding may change. Or, like many folks, becoming an Uber driver and suddenly are pulling in a few hundred extra dollars each weekend. That could affect your taxes due.
If you are not having enough taxes withheld from your pay, you will likely owe a large sum the following April 15. And if you don't pay, the IRS can and will place a lien on your property. Why don't you want a lien on your property? IRS liens last 10 years, and usually release automatically if the IRS has not refiled them. But, you are better off to have them removed immediately. Getting the IRS to release a lien usually involves: (1) paying the tax, interest and penalties; or (2) posting a bond guaranteeing payment.
The IRS can be quite accomodating to help you pay your taxes that now over due. One way of doing this is to set up an installment agreement, such as Ms. Azalea did. The lien will probably not be released until the debt is paid off, which is why you should "nip it in the bud" before it's ever filed.
Sound confused? Tax liens and IRS matters can be stressful and we are here to help. Our approach to client concerns are proactive; we help clients plan and prepare to prevent any large balances owed as a result to overlooked changes.
If you have questions about the IRS, withholding, had a change in your income status or are ready to review your tax plan for the rest of the year, call us at 216.831.0733 or info@zinnerco.com. We're ready to start the conversation and ensure you are compliant --while being fancy.