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4 Types of Debts That Might Cause Your Tax Refund to Be Withheld

4 Types of Debts That Might Cause Your Tax Refund to Be Withheld

By on Jun 22, 2017 in IRS Audit, Tax Problems | 0 comments


Common Misconceptions About TaxesBelieve it or not, there are very few reasons why the Internal Revenue Service (IRS) would need to withhold your tax refund. The list is very short, but they all have the same thing in common: they’re federal related.

  1. Existing Tax Debt

If you currently owe the IRS, then the best thing you can do is pay that debt as soon as possible. It’s understood that sometimes the balance far exceeds the amount that one can afford to pay. This doesn’t mean that you should ignore the bill altogether, because it’s not going away! The IRS is very serious about collecting what is owed to them. Neglecting to pay your IRS tax debt can spiral into serious consequences. If you do not pay, the IRS will start garnishing your paycheck, taking a generous percentage from your paycheck until the total amount of debt is paid for. If this method isn’t quite getting the balance down, the IRS will take further steps to collect what’s owed to them. For instance, if you are in the middle of getting your wages garnished and you end up getting a refund for the next tax-filing season, don’t expect a check, and don’t make any extravagant plans either! Expect that amount to go straight toward your tax debt.

  1. Federal Debt

Owing a tax debt is just one of ways the IRS can withhold your refund. If you owe any federal agency, the IRS has the right take your annual tax refund to pay that debt. Many taxpayers don’t realize that this also includes federal student loans. You can’t file bankruptcy to get out of paying your student loans. Because it’s a federal loan, be very confident in believing that any outstanding federal debt will be collected. It’s up to you, the taxpayer to choose whether it’s going to be on your terms or theirs, preferably yours!

  1. State Taxes

Owing state taxes is another reason the IRS can withhold your annual refund. This is something homeowners and business owners need to take into account because this line of business can stretch across several states. Also, state taxes can easily be overlooked while trying to figure out your federal taxes, all the while crossing your fingers, secretly hoping you don’t owe anything!

  1. Child Support

The responsibility of paying child support is something that one cannot hide from. The myth that you no longer have to pay child support when the child reaches the independent age of 18 only applies if the child support was paid on time. One can go 18 years without paying child support, but the moment they start collecting a paycheck, the IRS will garnish those wages from back years of delinquent payments.

Avoid Them All!

It’s wise to do whatever you can to take care of any outstanding federal debt that you might have now to prevent your tax refund from being seized. If you’re feeling overwhelmed about the matter, call Success Tax Relief today for a free consultation at 877-825-1179. You can also email or contact us through our online form today.

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