Pay Off Tax Debt in 3 Easy Steps
Tax debt can be extremely stressful. Your first instinct may be to panic and spin your wheels trying to figure out how to manage the difficult situation. If you find that you owe a large amount of money to the IRS, follow these 3 easy steps to pay off your debt once and for all.
1. Decide how much help you want.
You should give some thought, very early in the process of developing a plan, whether you want to manage the process yourself or hire a tax professional to help. This really depends on your preference and how much you owe.
The general rule of thumb is that it is feasible to manage the process yourself if you owe the IRS less than $10,000. If you owe more, you will likely need help reviewing your returns and calculating just how much you can afford to pay.
If you decide to hire a professional, definitely take a close look to be sure that you are partnering with a reputable firm that has experience negotiating with the IRS.
2. Consider amending your return.
If you have already filed your return, consider reviewing it again to see if you happened to overlook any major deductions. A tax professional can really help with this. If you discover that you can deduct more than is on the return you already filed, consider amending your return. You will need solid documentation for this process but it may be worth it if it saves you money in the end.
3. Consider these strategies for managing tax debt and decide what works best for you.
- Installment Agreement: In many cases, the IRS allows you to pay your debt to them over time in monthly payments rather than in one lump sum. Keep in mind that you are still responsible for penalties and interest that accrues over time if the IRS grants this agreement.
- Offer in Compromise: If paying the entire debt to the IRS would cause financial hardship, you may qualify for an offer in compromise. Under this plan, you settle your debt with the IRS for less than you owe. The application process is tedious and the IRS requires significant financial information to process the request.
- Not Collectible: In some cases, the IRS will voluntarily agree not to collect your debt to them for about a year. This can give you time to try to save the money so that you can make the payment.
- Bankruptcy: Again, this can be difficult, but if you file Chapter 7 or 13 bankruptcy, you may be able to release your tax debts in this process.
Success Tax Relief has 30 years of experience helping taxpayers determine the best course of action for paying off their debt. This is a unique and personal process that requires some time and attention, but our team can offer advice based on your individual situation. We’ll review your return, help you with an amendment if necessary or help you submit strong applications for an offer in compromise or installment agreement. Give us a call today at 877-825-1179 or contact us online now if you need a strategy for managing your tax debt. We can help!