Tax FAQ Series – I owe taxes for a previous year, but I am getting a refund for the current year. What should I do?

You can just pay the difference. When you’re entitled to a refund, the IRS will first check to see if there are any amounts due for prior years and apply the refund to those years, then send you the difference if there’s any left. So if you owe for prior years, and are entitled to a refund that doesn’t completely cover the prior year balances, you can just pay the difference. Keep in mind that the IRS also charges penalties and interest on prior balances so the amount you pay may not exactly cover the difference. But the IRS should notify you if there are still outstanding amounts on your tax account once the refund has been applied to the old balances.

If you have additional questions or would like assistance with your tax filing or strategy, contact us today at (480) 888-7111.


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