How to Make a Plan to Pay Your Back Taxes
If you find yourself owing back taxes to the IRS, you are not alone. It is estimated that nearly 10 million Americans are behind on their tax bills. The IRS is not likely to forget or forgive this debt, so what is your best bet for getting you and your family out of it? Coming up with a reasonable plan that you can follow is one of the best strategies for actually facing this issue head on so that you can finally move forward and find relief.
What are your best options?
Surprisingly, you actually may have more options for paying your back taxes than you might imagine. The most important thing to keep in mind is that the sooner you get started the better. Every single day that you delay paying back taxes, you are accruing penalties, interest and fees. The sooner you start paying, the less you will have to pay back.
The IRS actually offers several appealing options for paying your back taxes. If you are delaying payment because you feel like you do not have the money to spend, consider one of the following solutions:
1. Installment Agreement
If you owe a significant amount in back taxes and would like to pay it back over time rather than in one lump sum, an installment agreement may be the best option for you. It’s very similar to a credit card payment – you pay a portion of your bill back monthly for a fixed period of time. For example, if your balance is $10,000 or less and you meet some basic criteria, the IRS is actually required to grant you this payment option. Keep in mind that the IRS realizes that it is much better to get their money over time than not at all, so if you submit the appropriate paperwork and act fast, an installment agreement may help put you on your way to being debt free.
2. Offer in Compromise
If you truly do not think that you can afford to pay the IRS what you owe in back taxes, then you might want to consider an offer in compromise. In some cases, the IRS will allow you to negotiate to pay a portion of what you owe rather than continuing to accrue interest and penalties. You have to make a good case and not all offers are granted, so it is important to submit a strong application. And, if the IRS grants this to you, you should be sure to file (and pay!) your taxes on time for the next 5 years.
3. Get Help
If you owe the IRS back taxes and are trying to figure out the best way to get out of debt, consider hiring some help. A tax firm can help you submit all of the correct documentation and give you the best possible chance of being approved for an offer in compromise or installment agreement. Success Tax Relief has more than 30 years of experience and works directly with the IRS so you do not have to. Success Tax Relief takes the stress out of tax issues so you can focus on getting your life back! Stop worrying and get started by contacting us today!