In our many years offering tax services in Orlando we have seen that when you leave your residing state and move overseas there is a chance that you still have to pay your taxes. For this you have to know your state’s tax filing requirements. States like; Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming do not file taxes if you are residing abroad. But if you are an Orlando resident, you might need to know how the tax payment works in your state.
Most of the states including Orlando have some rules according to which they decide whether or not you are considered a resident.
The criteria for defining a residence are based on these factors; if you have a real estate in your residing state, any place/home where you could return to, personal possession, your driving license, registered to vote, bank account, mailing address, and sometimes they see if you have any family members still living in the state. These are the ways through which the state of Orlando may find out if you have any chances of coming back to the state.
Orlando tax services follow the rule that if you are residing abroad for more than 6 months than you have to hand over all of your real estate, driver’s license, voter registration, and bank accounts. This way the state ensures that you are not a resident of Orlando anymore and you will not be liable to pay taxes.
These are some rules and policies of a state you need to learn before planning to move to some other country. Else, the state will not be responsible for any problems you face regarding tax repayment. Another important thing to know is that if you plan to shift back to your previous state, then it will be considered that your ‘tax domicile’ had always been in the same state and you’ll have to pay the taxes for all the years you spent abroad.
Simple Rules to Consider
Change your tax domicile – if you want to reside outside Orlando, make sure you change your tax domicile so that you are not liable to pay taxes. Shift your tax domicile to the state you are residing in currently so that you do not get in a situation where you have to pay taxes for two states at a time.
Running Business in your state – if you are running a business in Orlando and are residing abroad then you might need to move your business to your current location. When you have a source of income from the previous state then that state might consider you as a resident which will verify you as a tax domicile for the state.
If you want to stay out of trouble then you must check properly with your state’s resident tax payer’s rules. This will make it easier for you to understand what you need to do when you are planning to move out of your current state.Orlando tax servicesare flexible for the resident and might provide you with alternate options for tax repayment even if you are residing abroad.
The Effect of Not Paying Taxes on Your Credit
Did you just miss the deadline? Too bad, you may have to bear serious consequences now. Had you hired reputed tax services Orlando for the job, things will not have been this way. When you do not pay your taxes, you are subjected to penalties and late payment fees, but these are not the only downside. Taxes also affect your credit scores, and if you are looking forward to buy a home or a car, this is not good for you.
When you owe money to the IRS, it is treated as a debt and so down your score will fall, and decrease quite significantly. Here is a quick review of what might happen if you do not pay your taces in time.
You will have to bear penalties
There are actually two different cases when it comes to not paying taxes. In one, you do file returns, but do not pay the bill. In the second case, you neither file the return nor pay the due amount. In both the situations, you have to bear a penalty, which are as follows.
Of you fail to file, you have to pay a fee, which is between 5% and 25% of your tax bill.
If you file for an extension, you still have to bear a 0.05% late filing fee. You will also have to face 3% interest, which will compound on a daily basis.
Should twos months pass, you are charged 100% of the taxable amount or $135, which of these is lower.
Apparently, they may not seem a lot, but when you add them up, they will become quite significant,
So should you ignore?
Not at all? Ignore anyone, but not the IRS. They will make you pay for it if you do. So if you do not pay your taxes at all, the IRS will place a lien on any property or assets which you own. This is their federal right, and anything that is worth your debt, the IRS can make a claim on it.
Though liens are not god, what is great is the fact that they IRS does not take this step until several years have passed. In other words, this means you still have a lot of time to pay your debt and you should utilize it. And by the way, the IRS also allows installments, but you have to notify them first.
The effect on your credit
Generally, your scores will fall down by 100 or 150 points. If your scores were not that high, even a decrease of 100 points will incur financial trouble for you. What if your score is high? 100 points is still a lot and will affect your mortgage rates, insurance rates and the lie.
What is worse is the fact that though debts may be forgotten, the lien will not be. Until you pay your due taxes, it will show up on your report and keep affecting your scores.
So pay your taxes and keep yourself away from trouble.
If you need more information about our Orlando accounting and tax services, please contact us at 407-344-1012. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, Clermont, Davenport, Hunters Creek, Lake Nona, Celebration, Winter Park, Windermere, Dr. Phillips, Maitland, Altamonte Springs, Winter Garden, Ocoee, Apopka, Belle Isle, Edgewood, and Oakland FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt.