About 140 million tax returns are filed every year alone. Many of those people had a ton of trouble when it came to paying off their tax bills.
Do you have a tax bill you can’t pay in full? Are you just confused about what to do?
Let’s go through how to manage your tax bill.
Ask For a Payment Plan
You can request a payment plan from the Internal Revenue Service (IRS) if you are unable to begin paying your tax bill in full. Payment plans make it possible for you to make monthly payments toward your tax debt.
In most cases, you’ll be able to set up either short or long-term payment plans with the IRS, depending on how extensive your debt actually is.
Request an Offer in Compromise
If you don’t have the resources available for financing your tax bill in full and do not qualify for a payment plan, you may be able to negotiate what’s called an offer in a compromise with the IRS. This allows you to settle your tax debt for less money than the full amount owed.
Depending on your situation, you may be able to claim currently not collectible status. However, these options are only available in specific cases, so you’ll want to talk to the professionals before you sign anything.
Temporary Delay of Payment
Another of your many tax bill options is a temporary delay of payment. If you are experiencing a temporary financial hardship, you may be able to request a temporary delay of payment from the IRS.
This will allow you to postpone making payments on your tax debt until your financial situation improves.
Request An Extension
If you need more time to pay your tax bill, you can request an extension of time to pay. This will give you an additional 60 to 120 days to pay your taxes, depending on the agency and the circumstances.
If you’re in this situation, you’ll likely want to talk to the professionals to ensure that your case for an extension is iron-clad. Otherwise, you could end up in an even trickier situation.
Tax Relief Programs
Depending on your circumstances, you may be eligible for one of several tax relief programs that can help reduce or eliminate your tax debt. These programs may include the Fresh Start Initiative, the Hardship Program, or the Low Income Taxpayer Clinic.
Declare Bankruptcy
In some cases, you may be able to discharge your tax debt through bankruptcy. However, bankruptcy should generally be considered a last resort, as it can have serious and long-lasting consequences.
Bankruptcy will make it a lot harder for you to get credit in the future, so if you have a lot of upcoming investment opportunities, it’s best to steer clear whenever possible.
Figure Out Your Tax Bills Today
There’s a lot that goes into understanding your tax bills, so ensure that you get on it before tax season hits.
Are you searching for more advice to help get your taxes in good shape? Read through some of our other tax-based articles today.
