Tax season can be a stressful time, especially if you find yourself facing a hefty tax bill that you can’t pay in full. The good news is that the IRS offers solutions to help taxpayers manage their tax debt, including installment agreements and short-term extensions. In this article, we will explore these IRS payment plans and how they can provide financial relief to individuals and businesses struggling with their tax obligations.
Understanding the Challenge
Life is unpredictable, and there may be times when unexpected financial burdens prevent you from paying your taxes in full by the due date. Whether it’s a sudden medical expense, a job loss, or any other unforeseen circumstance, the IRS understands that not everyone can meet their tax obligations on time.
IRS Payment Plans Explained
1. **Installment Agreements:**
An IRS installment agreement is a structured payment plan that allows you to pay your tax debt over time. It’s an excellent option for those who can’t pay their full tax bill upfront. Here’s how it works:
– **Application:** To get started, you’ll need to apply for an installment agreement. This can typically be done online, by mail, or in some cases, over the phone.
– **Payment Amount:** The IRS will work with you to determine a monthly payment amount based on your financial situation. It’s crucial to be honest and accurate when providing your financial information.
– **Fees:** Keep in mind that there may be setup fees associated with installment agreements. However, these fees are generally lower for low-income taxpayers.
2. **Short-Term Extensions:**
If you need a bit more time to pay your tax bill but believe you can do so within 120 days, you can request a short-term extension. Here’s what you should know:
– **No Setup Fees:** Unlike installment agreements, there are no setup fees for short-term extensions.
– **Penalties and Interest:** You will still be subject to penalties and interest on the unpaid balance during the extension period. However, the penalties are typically lower than those associated with installment agreements.
Benefits of IRS Payment Plans
Now that you understand the basics of IRS payment plans, let’s explore why they can be a lifeline for individuals and businesses facing tax debt:
1. **Financial Relief:**
IRS payment plans provide immediate financial relief by allowing you to spread your tax payments over an extended period. This can prevent you from draining your savings or going into debt to cover your tax bill.
2. **Avoiding Collection Actions:**
By entering into an IRS payment plan, you can avoid more severe collection actions such as wage garnishment, bank levies, or asset seizures. This protects your financial stability and peace of mind.
3. **Customized Plans:**
The IRS works with you to create a payment plan that suits your financial situation. Your monthly payments are tailored to your ability to pay, ensuring that you can meet your other essential financial obligations.
4. **Improved Credit Score:**
While your tax debt remains unpaid, it can negatively impact your credit score. Setting up an IRS payment plan and making consistent payments can help you rebuild your credit over time.
5. **Reduced Penalties:**
Although you’ll still incur interest on the unpaid balance, the penalties associated with IRS payment plans are generally lower than those imposed for failing to pay taxes on time without an agreement.
How to Apply for IRS Payment Plans
Applying for an IRS payment plan is a straightforward process:
1. **Gather Necessary Information:**
Before applying, gather your financial information, including details about your income, expenses, and the amount you owe. This will help the IRS assess your ability to pay.
2. **Choose the Right Plan:**
Decide whether you want to apply for an installment agreement or a short-term extension based on your financial circumstances and how quickly you can pay your tax debt.
3. **Apply Online or by Mail:**
You can apply for an installment agreement or a short-term extension online through the IRS website. Alternatively, you can submit Form 9465, Installment Agreement Request, by mail.
4. **Await Approval:**
Once you’ve applied, the IRS will review your request and notify you of their decision. If approved, they will provide details on the terms of your payment plan.
Conclusion
Dealing with tax debt can be overwhelming, but the IRS payment plans discussed in this article can offer a lifeline during challenging financial times. These options provide a structured and manageable way to address your tax obligations without resorting to drastic measures. Whether you opt for an installment agreement or a short-term extension, taking proactive steps to address your tax debt can lead to financial stability and peace of mind. Remember, when in doubt, seek guidance from tax professionals or IRS representatives to ensure you make the best choice for your unique situation.
Filing taxes can be a daunting task for many individuals, but it is a necessary part of managing your personal finances. In this article, we will cover everything you need to know about filing taxes for 2022.
Know Your Filing Status
Your filing status is an important consideration when filing taxes. There are five filing statuses: single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent child. Each status has different tax brackets and deduction limits. Choose the status that best reflects your situation.
Gather Your Documents
Before you start filing taxes, you will need to gather all the necessary documents. These include your W-2, 1099s, and any other income or tax statements. If you have any deductions, make sure you have the relevant receipts and documentation for every deduction.
Understand Tax Deductions and Credits
Tax deductions and credits can help reduce the amount of taxes you owe. Deductions are expenses that reduce your taxable income, while credits directly reduce the amount of taxes you owe. For the everyday American, some common deductions include mortgage interest, charitable donations, and student loan interest. Although, most taxpayers will take the “standard” deduction. Common tax credits include the earned income tax credit and child tax credit.
Choose the Right Tax Preparation Method
There are several ways to prepare and file your taxes. You can use tax preparation software, hire a tax professional, or file by paper. The method you should go with depends on your situation. For the most accurate and best result, we always recommend hiring a tax professional that can ensure everything is filed correctly. If you owe back taxes from other years, then we highly recommend hiring a tax resolution specialist to look into your case to ensure you the IRS does not garnish your wages or put a tax levy on your assets.
File on Time
The tax filing deadline for 2022 is April 18, 2023. Make sure you file your taxes on time to avoid penalties and interest. If you are unable to file by the deadline, you can request an extension. But, remember an extension only relates to the filing of the return. If you owe for 2022, and you file an extension, what you owe must be paid in with the extension to avoid failure to pay penalties.
Pay Any Taxes Owed
If you owe taxes, make sure you pay them on time. The IRS offers several payment options, including online payment plans, direct debit, check or money order. Failure to pay taxes owed can result in penalties, interest charges, and worse case scenario, tax liens and gransihments.
Keep a Copy of Your Tax Return
Make sure to keep a copy of your tax return for your records. You may need it for future reference or to apply for loans or financial aid.
What to Do If You Owe Back Taxes
If you owe back taxes, the most important thing you can do is take action. Ignoring your tax debt will only make the situation worse, as the IRS will continue to assess penalties and interest on the amount owed. Contact a tax resolution specialist to look over your case, and let them guide you through the process to ensure you don’t jeopardize your financial future.
Our firm specializes in tax resolution. We have CPAs, EAs, and attorneys who can represent you before the IRS. We serve clients virtually so don’t hesitate to reach out. If you want an expert tax resolution specialist who knows the “ins and outs’ and knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. https://calendly.com/premierbusinessstrategist/virtualconsult
In conclusion, filing taxes can be overwhelming, but it doesn’t have to be. By understanding your filing status, gathering necessary documents, taking advantage of deductions and credits, filing on time, paying any taxes owed, and keeping a copy of your tax return, you can ensure a successful tax filing experience in 2023.
The tax-filing deadline will be here before you know it and pretty soon, you’ll be gathering up your receipts and plugging in numbers. I know you’re hoping for good news, and praying for a big refund in the process.
If all goes well you won’t owe anything and you might even be getting back a nice refund. But, what should you do if you owe money? If you know you owe money to the IRS, you might be tempted to not file a return, but that is the worst thing you can do!
If you fail to file on time, the IRS will come after you until you do. Worse yet, the tax agency can assess up to 25% just in late filing penalties. Plus, interest will start piling up right away. Instead of not filing, here are the steps you should take if you owe money to the IRS.
Seek Out Tax Deductions You Can Still Claim
If you find that you owe taxes, all might not be lost. As long as the April 15th tax-filing deadline has not yet passed, you can still add money to an IRA, lowering your taxable income in the process. As long as you meet the income guidelines for a deductible IRA, this step alone could lower the amount you owe or even entitle you to a refund.
Pay as Much as You Can As Soon as You Can
Speaking of paying up, it is important to pay as much as you can as soon as
you can. Even if you file for an extension, the clock will still be ticking on any required payments, and the penalties and interest can add up pretty quickly.
If you know you owe money to the IRS, paying it off should be your number one priority. That might mean squeezing your dollars extra hard or trimming your budget to the bone, but it beats paying penalties and high interest to the IRS.
Seek Professional Tax Help and Guidance
Owing money to the IRS is no joke, and dealing with the situation is not something you should try to tackle on your own. If you know you owe money to the IRS and cannot pay the bill in full, it is important to seek professional help and guidance.
A tax resolution expert can guide you through the process, helping you prepare, submit and negotiate a payment plan that works for you and the IRS doesn’t get to manage your monthly cash flow. You also may qualify for an offer in compromise, which settles your case for less than the amount owed, but it’s important to act as quickly as possible – you do not want your tax situation to get worse.
Hopefully, you will find a reason to smile when you file your taxes this year. Hopefully, you will find that you are due a refund, and you can begin making plans for the money that will soon arrive in your bank account.
If not, it is important to know what to do and which steps to take. If you owe money to the IRS, you need professional help and guidance, so call a tax relief expert right away to preserve your rights and your money.
Before you make a decision, let our firm see if we can help. We negotiate with the IRS day-in and day-out. We can potentially settle your tax debt for a lot less than you owe. Call us today to find out. Our tax resolution specialists navigate the IRS maze so you don’t have to. https://calendly.com/premiersmlbus/consult
Filing your taxes is never a fun thing to do, but if you don’t file them at all then the IRS will come calling. They have unbridled power to file a return on your behalf in theirs, not yours, best interest.
They have powerful collection tools and an unforgiving nature that makes this one of the worst mistakes anyone could make. Getting on their bad side isn’t easy; having years worth of unfiled returns only adds fuel to the fire!
The IRS is always on the lookout for taxpayer’s who haven’t filed legally required income or payroll tax returns. If you have unfiled tax returns, it’s only a matter of time before they find out and demand the return and their money with penalties and interest! When it gets to a point where the IRS contacts you, the amount they claim you owe will be far greater than the amount you actually owe if you haven’t filed. You don’t want this situation and unfortunately in these circumstances the amount they claim you owe is what you will have to pay unless you prove otherwise.
Before we jump into it, if you have back tax debt or years of unfiled tax returns, contact our firm for a consultation https://calendly.com/premiersmlbus/consult. You won’t have to talk to, or meet with, the IRS and our firm can provide the peace of mind you need to resolve your tax issue.
The longer you wait, the worse the situation will become. Here are some important steps you can take if you have unfiled returns with the IRS.
If you’ve been neglecting your taxes for too long, it’s time to take care of things. An experienced tax resolution firm can help get things back on track and oftentimes, even if the records are missing or destroyed, there are alternative methods to reconstruct your tax return. However, only a tax resolution professional will be able to accomplish this.
If you are missing W2 and 1099 forms from past years an experienced tax resolution pro has the ability to retrieve these as well.
The fear of not having the money to pay has caused many people to avoid filing their returns altogether , but those worries are often misplaced.
According to the IRS statistics approximately one-third (34%) of all unfiled federal tax forms may actually be due a refund! Now that you have all the documentation you need, it is time to run the numbers. And while you may not be able to get exact figures without filing the returns, you can get an idea of how much you might owe.
Whether you are an individual, partnership or corporation there is a strong temptation to let your past mistakes go. But doing so would put both financial security and freedom at risk – which makes filing those old tax
returns seem like tempting fate instead of bravely taking on the challenge ahead! It is a misdemeanor and possible jail time for failing to file legally required income tax returns. Don’t let this happen to you.
The IRS will assess a 25% failure to file penalty as well as up to a 25% failure to pay penalty, plus interest. Just filing your return, even if you can’t pay, will save you big time!
When you’re dealing with back taxes, it’s important to have someone on your side who knows what they are doing. A tax resolution professional can give invaluable advice and guidance about how to lower the amount that the IRS claims you owe and the best steps moving forward for your situation.
You’re not alone in the battle against the IRS. The IRS is ready and waiting for you, so it’s best to have an expert on your side who knows how to get the help you need and deserve.
A tax resolution professional can give advice about what needs to be done; from gathering documents like W-2s or 1099’s right down to making sure everything looks perfect when filing those unfiled returns.
Contacting the IRS on your own is not only a scary thought, it’s highly not recommended, but avoiding them will make your situation worse. When you don’t file your taxes and lose track of what’s owed to the government it can have devastating consequences for both yourself personally as well as financially. The IRS stores detailed records of everyone in their database
and chances are, you are already on their radar due to your lack of compliance.
Filing those returns ASAP will go miles in helping you get back on track before any more damage becomes irreversible. Filing your taxes might seem like a daunting task, but there is help for you. The right professional can make things right with the IRS and relieve the stress from this difficult situation.
The stress of not filing taxes can be enough to make you lose sleep. What’s worse, IRS problems usually affect all aspects of one’s life. Do yourself and your sanity a favor by filing your returns now; it isn’t nearly as scary or daunting as receiving the final collection letter from the IRS or getting your bank accounts levied.
If you are looking for tax relief, we can help! To help ease the stress from your situation, we offer a free consultation with one of our tax resolution experts. You don’t have to worry about confidentiality or cost because the consultation is completely free. Schedule an appointment with one of our experts today by following this link: https://calendly.com/premiersmlbus/consult.
When you owe money to the IRS, it is hard to think about anything else. While being in debt is never fun, no matter who the creditor is, the IRS enjoys almost unlimited power to collect the money they are due.
Unlike your mortgage lender or credit card company, the Internal Revenue Service has the power to attach your wages, raid your bank account and even take your freedom. No other creditor even comes close in terms of its power and influence, and taking on the agency on your own could be asking for trouble.
If you have received a notice from the IRS, you need to act fast, and you need the right assistance in your corner. Taking on the IRS requires specific expertise, and that is why it is so important to work with a quality tax resolution company. Here are seven reasons why working with a tax resolution specialist could save your good name – and your bank account.
Owing money to the IRS can be pretty frightening. There is a reason those three letters strike so much fear into the hearts of ordinary citizens, even those who have done nothing wrong.
If you are in trouble with the IRS, you cannot afford to ignore the issue, so act fast and get the help you need today. Working with a tax resolution expert carries a host of benefits, starting with the nine outlined above.
Most likely, you wouldn’t go to court without a lawyer. Similarly, it’s best not to deal with the IRS without expert representation which can be provided by a tax resolution expert, who by training, is also a CPA, attorney or enrolled agent.
Reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem. https://calendly.com/premiersmlbus/consult
If you are running a small business, you have one unwanted partner that will dig into your pocket every year, it’s the IRS. The IRS wants to know what you are doing, how much you are earning and most importantly how much you are paying in taxes, and the tax agency is becoming increasingly aggressive in this regard. While the audit rate for individual returns has been hovering at far less than 1%, the audit rate for small businesses can be as much as 10 times higher.
It does not matter if you operate as a sole proprietor and use Schedule C to claim your income or if you are set up as a C-corp, S-corp or LLC – the IRS is watching what you do, and if they think you are not paying your fair share they will certainly come calling. When that demand letter from the IRS arrives, knowing what to do next can make all the difference, and the more you educate yourself the easier it will be to deal with, and eliminate, the tax debt.
Note: As a tax resolution firm, we always recommend that you reach out to a professional who knows how to aggressively negotiate and defend you against the IRS on your behalf. If you owe back taxes or are under audit, our firm can help negotiate with the IRS and potentially settle your tax debt. Call us today. Our tax resolution specialists can navigate the IRS maze so that you have nothing to worry about. Set a meeting here.
Small business owners are increasingly the target of enforcement efforts by the IRS, but the IRS does have some programs in place to make paying what those business owners owe easier. In some cases those small business tax relief and tax resolution programs let you settle for less than what you owe but qualifying is not as straightforward as you might think.
For businesses that may be eligible, the assistance of a tax resolution specialist is absolutely critical. These experts can help guide you through the process and make sure you qualify, so you can rest a little easier and get back to building your business.
Payment Plans/Installment Agreements
If the amount your small business owes to the IRS is relatively small and you do not want to deal with additional hassles, it may make sense to pay the entire bill in full. If paying in full would be a hardship, the IRS does offer payment plans, and setting one up can make paying back what you owe easier and more financially palatable.
Keep in mind that interest will continue to accrue while the debt remains outstanding, and that is something to think about.
Offer In Compromise
If you’re under a lot of financial hardship, it may make more sense to try for
an offer in compromise (OIC), a special IRS program that could allow you to pay back less than you owe.
The offer in compromise program is a popular one with individual taxpayers and small business owners. If paying the entire amount would create a financial hardship for you, your family or your business, a tax resolution specialist can help you make the case to the IRS that you deserve a break.
What’s the best option?
Each of these options has its pros and cons, and it is important to understand how these programs work and who qualifies to use them. If your small business is in trouble with the IRS, taking the right action right away could reduce the amount you owe, give you some breathing room and allow you to focus on your clients – not on your taxes.
Running a small business has its challenges, but those difficulties are nothing compared to the stress and anxiety small business owners feel when dealing with the IRS. With so many small business owners now in IRS crosshairs, it has never been more important for freelancers, gig workers and the self-employed to have an advocate in their corner.
If you find yourself on the wrong end of an audit, a tax bill or an enforcement action from the IRS, the steps you take next are absolutely critical. Trying to take on the IRS on your own is a dangerous, and potentially expensive, thing to do, and you should always contact a tax resolution firm.
By working with an expert, you can gain access to vital information about small business settlement programs the IRS offers. You can gain access to the expertise you will need to settle your tax bill for less than you owe and get back in the good graces of the IRS. Time is of the essence when the IRS comes calling, and with the interest and penalty clock ticking you do not have one second to waste. So call us, your tax resolution expert, for a case evaluation. Set a meeting here.
If you hire an employee for your Schedule C business, you can qualify for several valuable tax credits. Each credit is different, and certain limitations apply to all or most employer tax credits. Remember, tax credits are the best. They beat deductions. Note the difference below (using the 32 percent bracket):
Many tax credits are not available if you hire a person related to you, including children, stepchildren, a spouse, parents, siblings, step-siblings, nephews, nieces, uncles, aunts, cousins, or in-laws.
Eight Valuable Tax Credits for Business Owners
Below are listed the eight non-refundable tax credits that Schedule C business owners can claim when they hire employees.
The second option is more realistic for smaller businesses. Businesses often partner with childcare companies such as the Learning Care Group, Bright Horizons, and KinderCare to offer this benefit.
Key point. You might be surprised which places the government designates as having high poverty and unemployment. It’s worth checking out.
You can claim a credit equal to 20 percent of the first $15,000 in wages you pay to full- or part-time employees who both live and work in an empowerment zone.
Thus, the maximum credit is $3,000 per employee (20 percent x $15,000). The employees must work for you for at least 90 days.
If you would like to discuss how to take advantage of these or other tax credits, please call us at 757-410-8030.