There are one of two outcomes each year when you file income taxes. You either owe the federal government money or they owe you a refund.
While it is unfortunate to owe Uncle Sam back taxes, you are not alone. There are millions of Americans each year that have to pay back taxes.
The stress and frustration for taxpayers arrive when you have A) never owed the IRS money before, or B) are concerned about how you will pay back taxes.
IRS Form 1040-V is your best friend when it comes to paying back the IRS. Learn more about what you need to know about this crucial IRS document.
IRS Form 1040-V is a payment voucher used with Forms 1040, Form 1040A, or Form 1040EZ. It is essentially a statement that designates how much you owe.
You use Form 1040-V in conjunction with a check or money order that you send to the IRS to pay the balance due on the “Amount you owe” line of Form 1040, Form 1040A, or Form 1040EZ.
Using IRS Form 1040-V with your payment will speed up the processing and right your debt sooner. It is important not to send cash to the IRS. The agency prefers a check or money order for payment.
To prepare your IRS Form 1040-V, use the following steps:
● Line 1: Enter your social security number (SSN). Joint returns should use the SSN shown first on the return.
● Line 2: Enter the SSN shown second on your return if filing jointly. Ignore if you are a single filer.
● Line 3: Enter the amount you are paying by check or money order to the IRS.
● Line 4: Enter your name(s) and address exactly as it is shown on the income tax return.
If you are writing a check, you should make it payable to the “U.S. Treasury”, not the Internal Revenue Service (IRS). Also, include your name and address on the check or money order. In the memo section you can also add:
● The form number you’re filing (i.e. 2019 Form 1040).
● Your daytime phone number.
● Your social security number (SSN).
You should detach Form 1040-V along the dotted line. There is no need to attach your payment or Form 1040-V to your return. The IRS already has this information if you e-filed or mailed the return.
If you haven’t already mailed the return, include it (unattached) with Form 1040-V and payment to the address shown on the back of Form 1040-V that applies to you.
It is also possible to pay taxes owed by phone or online. You will need to order a direct transfer from your bank or use a debit/credit card to complete the transaction. Paying online or by phone can help you save time and make sure the payment is processed on time.
There are many Americans who struggle to pay off income tax each year to the IRS. If you are concerned with where you will find the money to pay off debt, do not panic. The worst thing you can do is ignore the IRS and avoid filing a return.
The IRS has established methods to pay back your debt over time. If you can’t immediately pay back taxes you can always request an extension. You can send a partial payment using Form 1040-V by the due date and then receive an additional 30-45 day grace period.
Or, if you believe you will need more than 120 days to pay off the debt you can also enter an installment agreement with the IRS. The installment agreement will work like credit card debt payments, as you pay back taxes off in monthly payments.
Levy & Associates is a tax consulting firm that has helped countless individuals with their taxes. We can assist you with any IRS Form, including 1040-V. Levy & Associates can also help reduce taxes owed as a result of filing errors by studying your return.
Find out all the services we offer and schedule an initial consultation (free of charge) through www.www.levytaxhelp.com or call 800-TAX-LEVY.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.