Remitting all the taxes you owe can be challenging, especially when facing financial problems. If you owe the IRS, it is vital to act promptly to avoid penalties and significant debt. This step can also prevent tax liens and stop the IRS from using harsh debt collection measures like seizing your assets.
Are you wondering about the best ways to deal with tax debt and protect your finances? Read on for tips on setting things right with the IRS and the benefits of working with a professional if you have delinquent taxes.
1. Ask for a Deadline Extension
Sometimes, you may fail to remit taxes due to delays. For example, you might be waiting for an investment to mature and use the funds to pay what you owe.
If you will likely get the funds to clear tax debt soon, it is advisable to ask for a deadline extension. While the IRS will not charge any fees for the process, they will impose a 0.5% monthly penalty on balance.
Requesting a short deadline extension will help you avoid paying fees associated with other tax relief programs. Besides, it gives you more time to get your finances in order and repay the total amount.
2. Apply for Installment Payment
If you cannot pay the taxes you owe in full, you should apply for debt relief. The IRS provides an installment agreement program to help taxpayers pay the amount they owe over an extended period.
Still, you must meet the eligibility criteria, including filing back taxes. Besides, your debt should be less than $50,000 but more than $10,00, including fines and penalties.
When the IRS accepts your application, they will require you to send a given amount each month for an agreed period. For example, if you choose a short-term installment plan, you will clear the debt within 120 days. On the other hand, the IRS will require you to pay delinquent taxes within 72 months with a long-term plan.
Enrolling in an IRS installment agreement program will help you avoid accruing penalties and fines. Further, you get more time to organize your finances and pay the debt without worrying about collection measures.
3. Do Not Ignore the Matter
While you may not be in a financial position to pay taxes, ignoring the issue will only worsen it. File your returns on time to avoid penalties associated with failing to submit your forms. Further, determine the most suitable repayment program and send your application within the deadline provided by the IRS.
If the IRS sends a notice or contacts you regarding tax debt, you should respond promptly. This measure will help you set things right and avoid consequences like:
- Property seizure
- Ruined creditworthiness
- Bank levies
- Wage garnishment
4. Contact a Tax Resolution Expert
Dealing with tax debt may be confusing without professional help. Set things right with the IRS by consulting a resolution expert near you. These will assess your situation and determine the best way to deal with accrued debt. Besides, they can identify the most suitable debt relief program and help you apply.
Another way a tax resolution professional may assist is by filing back taxes and determining the total amount you owe. They will then develop a tax relief plan and meet with IRS officials on your behalf.
If the IRS seized assets and imposed a bank or property lien, you cannot use the funds to finance debt. A tax resolution professional will help you negotiate a lien release. Further, they will ensure you only apply for a debt relief program that will not cause more financial challenges.
Contact FinishLine Tax Solutions to Set Things Right With IRS
Setting things right with the IRS can protect your reputation and lessen financial problems. At FinishLine Tax solutions, we will help you deal with debt using an ideal repayment plan. Our professionals can also determine the debt relief plan you qualify for and present the required forms. Contact us now to lower the effects of unpaid taxes.