Each year, millions of Americans are required to file in income tax return. However, for those that owe money to the Internal Revenue Service (IRS), it can be a daunting task. If you’re one of the many taxpayers that owe money, you might be hesitant to file by the deadline.
But did you know you may be able to get back taxes help directly from the government through repayment plans or debt forgiveness? The IRS might even accept less than what you owe if you have high debt but low income. Discover the tax help options below and learn how to sign up for available debt relief programs.
The process of filing a federal income tax return involves a lot of documents, many of which can seem very complicated. Common tax forms include:
- Form 1040
- Form W-2
- Form 1099
It can get even trickier if you have a unique situation, like owning a small business or being self-employed. There are various reasons for why you might owe the IRS gov taxes, such as the following:
- Filing incorrectly
- Making miscalculations on your federal tax return
- Filing late
- Failing to file
- Not withholding enough taxes throughout the year
- Not paying estimated quarterly taxes as an entrepreneur/business owner
- Deliberately failing to report your taxable income to the IRS
If you find yourself saying things like “I forgot to file my taxes,” or “I was too busy to go through my finances,” you typically won’t be excused from paying. Any unpaid taxes accumulate compounding interest daily, and you may receive a late payment penalty for each month you owe a balance.
The federal government is within its right to require payment from you. In fact, if you owe taxes and do not pay in a timely manner, you may be required to send a portion of your paycheck to the IRS as payment.
There are a few different levels of tax debt, which vary depending on how long it takes you to make payments:
- Liable – You owe taxes to the federal government
- First notice – The IRS sends a letter to explain your balance and demand payment in full. This amount may include accrued interest and late penalties.
- Subsequent contact attempts – The IRS sent you mail, called you, and may have visited you at work or home.
- Payment plan option – You cannot pay the balance immediately and cannot secure financing through other means, like a personal loan or credit card advance. You may be able to set up an installment agreement with monthly payments until your balance is $0.
- Collections – The government may garnish your wages, tax refund, and other government payments if you do not voluntarily pay your debt. The collection agency may also put a lien on your house or property.
- Seriously Delinquent – The federal government instructs the state department to deny, revoke, or confiscate your passport if you owe more than $55,000.
You may want to consider taking the tax help the IRS offers if you cannot find other means to pay your debt. An offer in compromise, for example, allows qualified taxpayers to pay less than what they owe.
It might be an option if you’re unable to pay the full amount of your debt, or if paying your full debt would create a financial hardship. The IRS considers the following factors when determining if you qualify for an offer in compromise:
- Your ability to pay
- Your income
- Your monthly expenses
- Any assets you may have
The IRS has different repayment plan terms, and your application and payment method can affect how much you owe the government. You should compare the following installment payment plans.
By Admin –