Do I Owe Taxes?

Officially, the IRS will send you a Notice and Demand for Payment by mail. This mailed notice will explain how much money you owe in taxes, penalties, and interest.

You may not even know that you owe back taxes to the IRS or another tax authority such as a state or county! If you or your business have moved locations, for example, then you may have missed any mailed notices from the tax authorities. More often than not, tax laws are changed or new tax laws are passed. If your accounting processes aren't fully compliant with a new tax structure, your business may be digging itself deeper into a tax hole with every transaction, and that's not good!

Knowing whether you owe tax is not just an issue for companies and businesses. If you are self-employed and you do not pay enough self-employment tax with your quarterly tax estimates, for example, then you may owe back taxes to the IRS.

Since 1982, the number of small businesses in the United States has increased by 49% so there are more and more small business owners who are at risk for incurring back taxes.

Self-employed people can get caught with a case of back taxes too. Self-employment tax payments are due each quarter, for example. Systems like QuickBooks can calculate the self employment tax rates.