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What to do if you haven’t paid your New York taxes in years

On Behalf of | Oct 18, 2024 | Federal And State Tax Collections |

Ignoring unpaid taxes can lead to serious problems. If you haven’t paid your New York taxes in many years, taking action now can help you resolve the issue and avoid further consequences.

Understand your tax situation

Begin by reviewing your financial records. Find out which tax returns you haven’t filed and how much you might owe. Knowing the exact years and amounts helps you address the problem more effectively. Gather all necessary documents like W-2s, 1099s, and other income records for those years.

Contact the tax authorities

Reach out to the New York State Department of Taxation and Finance. Proactively contacting them shows that you want to resolve the issue. You can call their taxpayer assistance line or visit a local office. Explain your situation honestly and ask about the steps you need to take.

File your past tax returns

Prepare and file all missing tax returns. Even if you can’t pay the full amount owed, filing the returns is important. This stops the state from filing a substitute return on your behalf, which might not reflect deductions or credits you’re eligible for. Use accurate information to complete each return.

Explore payment options

If you owe more than you can pay at once, consider setting up a payment plan. The state offers installment agreements that allow you to pay over time. Discuss your financial situation with the tax authorities to find a manageable payment option. Making regular payments can prevent further penalties.

Consider an offer in compromise

In some cases, the state might accept less than the full amount owed. An offer in compromise allows you to settle your tax debt for less. This option is typically available if paying the full amount would cause financial hardship. You’ll need to provide detailed financial information to qualify.

Be prepared for penalties and interest

Understand that there may be penalties and interest added to your unpaid taxes. Late filing and late payment penalties can increase the total amount owed. Paying as much as you can as soon as possible helps reduce these extra costs. Ask about abatement options if you have a reasonable cause for not paying earlier.

Taking prompt action when you haven’t paid your New York taxes in years can make a significant difference. By understanding your situation and knowing what steps to take, you can work toward resolving your tax debt. Addressing the issue now sets you on a path toward financial stability and peace of mind.