Tax Debt: Ways To Deal With It
IRS tax debt is a serious financial issue that should be quickly addressed. An Offer in Compromise is a settlement on your IRS debts so organising this is very important. If you have a tax debt from past years or have already done your taxes for this year and expect to owe money, you can always find a solution. The solution is not to ignore the debt and seeking the right advice from companies such as platinumtaxdefenders.com will help you on your way to tax debt freedom.
Don’t be ashamed to seek help; that’s exactly what it is there for! Finding the right attorney to help you on your case is part of the whole solution to your tax issues so get dialling today. Although the IRS has only ten years to collect on a tax debt, it has many very powerful tools at its disposal during those ten years and it can really take the stress off of you if you just deal with the debt now and fast than leave it. Possible solutions can include personal loans and savings, arranging instalment agreements to arrange a payment plan for your tax debt and an offer in compromise. If you owe an IRS tax debt, the best solution is to borrow funds or use savings to pay it. Better to pay that in full and repay a loan company or rebuild savings than have a blemish on your credit.
By paying the full balance when it’s due, the amount you owe will be much lower than if you request one of the IRS payment options, which will include penalties and interest. If you borrow against your home to pay the IRS tax debt, the interest you pay may actually be tax deductible. Be careful when considering drawing on a retirement fund to pay the debt as it could very well lead to additional taxes being owed. Check with a professional and the retirement plan administrator whenever you consider taking money from a retirement plan.
If you prepare your taxes before the deadline and realise you will be owing the IRS tax, you can file for an extension of time to pay. Depending on your individual circumstances, the extension can be anywhere from thirty to one hundred and twenty days. Pay as much as you can early to reduce the late-pay penalties and interest owed. Filing an extension will protect you from the late filing penalties which are severe. If you are experiencing financial hardship or other personal hardship like illness or a loss of financial records due to natural disaster, the IRS may grant a temporary delay of payment of your tax debt. In some cases, penalties may also be waived, but interest usually applies. You must contact the IRS to request the delay and the sooner you do this the sooner you can be helped. There are a lot of ways to get help when you encounter a tax debt and if you act quickly you can get this help sorted out long before any major penalties are handed to you.