Post by myTax Solutions on Mar 17, 2016 22:37:44 GMT
You may have heard these terms mentioned before. These are commonly used to describe the prerequisites that must be satisfied before you can be eligible for any type of payment plan or other options discussed on this forum.
First, you must be “current”, or up-to-date, with any tax deposits that you may be required to make. Not all taxpayers are required to make tax deposits, but depending on your situation and how much you are expected to owe in taxes, it is possible that the IRS can request that you make periodic deposits. The purpose of these payments is to have you make smaller payments over the course of the pending tax year, with the goal of avoiding the situation where a taxpayer gets blindsided by a huge balance at the end of the year when it comes time to pay taxes.
For individuals, these payments are referred to as “Estimated Tax Payments” or ETP’s.
For businesses, these deposits are called “Federal Tax Deposits” or FTD’s.
Second, you must be “compliant” with all filing requirements. This means that you must file all required past returns. Put simply, you will not be eligible for a payment plan or many of the other options discussed in this forum if you have missing tax returns. Don’t worry if this is the case, you don’t have to dig up all your receipts for the last 10 years. The easiest way to file past returns is to contact the IRS and request what are called “Wage and Income Transcripts” for any periods in which you have missing returns. These transcripts should provide all the information that you need to file past returns and you can either complete the returns yourself, or if you would like help, simply provide these transcripts to a local accountant or tax preparer and they should be able to do everything you need.
First, you must be “current”, or up-to-date, with any tax deposits that you may be required to make. Not all taxpayers are required to make tax deposits, but depending on your situation and how much you are expected to owe in taxes, it is possible that the IRS can request that you make periodic deposits. The purpose of these payments is to have you make smaller payments over the course of the pending tax year, with the goal of avoiding the situation where a taxpayer gets blindsided by a huge balance at the end of the year when it comes time to pay taxes.
For individuals, these payments are referred to as “Estimated Tax Payments” or ETP’s.
For businesses, these deposits are called “Federal Tax Deposits” or FTD’s.
Second, you must be “compliant” with all filing requirements. This means that you must file all required past returns. Put simply, you will not be eligible for a payment plan or many of the other options discussed in this forum if you have missing tax returns. Don’t worry if this is the case, you don’t have to dig up all your receipts for the last 10 years. The easiest way to file past returns is to contact the IRS and request what are called “Wage and Income Transcripts” for any periods in which you have missing returns. These transcripts should provide all the information that you need to file past returns and you can either complete the returns yourself, or if you would like help, simply provide these transcripts to a local accountant or tax preparer and they should be able to do everything you need.