Dear Wayne,
I make a big mistake. I am currently in a lot of debt so I decided a few years ago to change my number of dependents on my W4 so that I can get more money on my paycheck. Well, the problem is I put too many and now for the first time ever I owe back taxes. Although I have two dependents I still owe and the worst is I have not filed for 1999-2002.
My questions are what kind of interest will they make me pay and will they make me pay it all at once. I don’t have the money to pay it all at one time.
Thank you
Stressed Out?
Dear Sheila:
Good news: the interest rate for late payment of federal income tax changes to reflect current interest rate market conditions. So, it has been coming down over the past couple years just like all other interest rates.
Bad news: I really can’t tell you how much you’ll pay, however. You have a very complicated “back taxes” situation here. Sounds like you owe for several years, and the amount of interest and penalty will vary according to the actual amount of tax owed and the amount of time you take to pay it.
More bad news: You may owe penalty and interest to your state, too, it you haven’t filed state tax returns yet either.
I’m sorry, but your situation is just too complex to address in this type of Q&A format.
The best advice (and the only responsible advice) I can give you is this: You need to consult with a local tax professional to sort this out.
Sincerely,
Wayne
Wayne M. Davies is author of 3 tax-slashing
eBooks for small business owners and the self-employed. For a
free copy of Wayne’s 25-page report, “How To Instantly Double
Your Deductions” visit http://www.YouSaveOnTaxes.com
