If the COVID-19 pandemic has you falling behind in your work, you’re not alone. Turns out, even the IRS has trouble working from home.
The IRS still has roughly 1 million unprocessed tax returns from 2019, and 3 million pieces of unopened mail. The immense backlog built up during the IRS’s transition to remote work in response to COVID-19.
Though the IRS now has 59,000 staffers working remotely, it hasn’t been enough to prevent a huge delay in processing returns. The IRS is now offering weekend shifts and overtime work to combat the backlog. In the meantime, what does the delay mean for taxpayers?
You’ve Got Time Now. Use it to Your Advantage.
Since we’re past the November 2 deadline for filing electronically, all remaining 2019 tax returns must now be sent in by mail. Once you’ve mailed your returns, they will be stuck on the bottom of the stack until the IRS catches up.
The good news? This gives you time.
Once you file your returns, the IRS can’t bill or levy you until they’ve been processed. This delay can be a massive opportunity for anyone behind on their tax payments. Here’s how you can use this time to your advantage and get your finances in order:
File Your Past Due Returns
If you’re struggling with back taxes, this delay presents an ideal opportunity to catch up and file your missing tax returns. Boxelder’s team of tax attorneys can assess your situation, help you determine the right path forward, and negotiate with the IRS directly on your behalf. For more info, check out our page on tax relief.
Get Current with Your Estimated Tax
Estimated tax is a payment method for taxes on income that’s not subject to withholding. If you earn income through self-employment, interest, dividends, rents, or alimony, then you’ll likely need to make estimated tax payments throughout the year to stay caught up. Otherwise, you might be in for a rude awakening come tax season.. We can help guide you through the process.
Set up an S Corporation
If your business is set up as a sole proprietorship, then you’re likely paying far too much in personal income taxes. Setting up your business as an S corporation can reduce your tax liability and make your business more profitable, and the IRS backlog provides a perfect opportunity to finally get it done. For more info, see our page on choosing the right business entity for you.
Make Some Voluntary Payments
The IRS backlog has given you extra time not only to get caught up on your taxes, but also to make voluntary payments toward other debts. Use this IRS delay to chip away at your credit card balance, your student loans, or any other outstanding bills. It doesn’t have to be a huge payment. Financial wellness starts with taking the first step.
If you’d like to take that first step, but don’t know where to start, give us a call at 888-573-5775 for a free consultation. We’d be happy to help you start your comeback story.