How to Get Rid of Your Tax Debt
As one tax year ends and another begins, you might be thinking about your mounting tax debt and how best to manage it. Figuring out how to get rid of tax debt can be very stressful, complex and overwhelming. We have pulled together some steps that you can take to start the process of getting a clean slate and ridding yourself of tax debt once and for all!
Double Check Your Returns
One of the first things you should consider is making sure that the debt you think you owe is the correct amount. This is especially important if you have missed some deductions along the way that could end up meaning that you owe LESS in taxes. You can do this yourself or you can hire a tax professional for a review. If you determine that you need to amend a return, you want to be sure it is accurate and that you provide adequate supporting documentation so that you minimize your risk for an audit.
Tax Debt Strategies Offered by the IRS
The IRS realizes the reason many taxpayers are behind in their taxes is because they cannot afford to pay them at the present time. As a result, they have developed several programs to help taxpayers.
- Installment Agreement: Similar to a credit card, you can get approval to pay your tax debt to the IRS over time instead of in one large lump sum. This is appealing to many taxpayers who do not have access to a large sum of money. Keep in mind, however, that like a credit card you are responsible for paying additional penalties and interest in addition to the initial amount that you owe, so over the course of the payment period you will end up paying a significant amount more than you actually owe.
- Offer in Compromise: There are also cases in which the IRS understands that a taxpayer may not have the means available to pay the tax debt that they have accrued. An offer in compromise is sometimes granted to settle your tax debt for less than the amount that you actually owe. It often requires that you provide financial documentation that proves that you are not in a position to pay the full amount and often requires that you pay a sum upfront or over time to receive the reduction.
- Bankruptcy: You can sometimes eliminate some of your tax debt through Chapter 7 and Chapter 13 bankruptcy. The rules for this are strict, so you should pay close attention to what is required and the rules around what kind of tax debt can actually be eliminated.
If you find yourself in over your head with the IRS, you may be better off trying to get some help navigating the situation so that you can move past it once and for all. A reputable tax firm can assess your tax situation and determine the best course of action given your unique and specific situation.
Success Tax Relief has helped thousands of clients with all types of tax problems to see the light at the end of a very long tunnel. Our trusted professionals are available to help you right now! Just call 877-825-1179 and find relief today.