Tax Resolution Expert Shares Tips To Reduce IRS Debt As Recession Looms
No one likes owing the IRS money, but it happens to a lot of us. If you’re currently struggling with IRS tax debt, you’re probably looking for ways to reduce what you owe. Here are five tips that can help:
1. File your taxes on time. This may seem like an obvious one, but it’s important to remember that the sooner you file your taxes, the sooner you’ll know how much you owe. And, if you end up owing money, you’ll have less time to accrue interest and penalties. So, do yourself a favor and get your taxes filed as soon as possible.
2. Pay your taxes in full. If you can’t pay your taxes in full, it’s important to at least make a partial payment. This will show the IRS that you’re taking your tax debt seriously and that you’re working on paying it off. Not only that, but making a partial payment will also help reduce the amount of interest and penalties you’ll accrue.
3. Set up an installment agreement with the IRS. An installment agreement allows you to pay off your tax debt in monthly payments. This can make paying off your debt more manageable and help reduce the amount of interest and penalties you’ll owe. To set up an installment agreement, simply fill out Form 9465 and submit it to the IRS.
4. Request a hardship extension from the IRS. If you’re truly unable to pay your tax debt, you may be able to request a hardship extension from the IRS. This will give you more time to pay off your debt without accruing additional interest or penalties. To request a hardship extension, simply fill out Form 1127A and submit it to the IRS.
5. Negotiate with the IRS. If all else fails, you may be able to negotiate with the IRS to settle your tax debt for less than what you owe. This is called an Offer in Compromise (OIC). To qualify for an OIC, you must prove that paying your full tax debt would create a financial hardship for you or your family. You can find more information about qualifying for an OIC on the IRS website or by speaking with a tax professional.
If you’re currently struggling with a large amount of IRS tax debt, contact a tax advocate who offers IRS resolution services. For smaller debts, there are things you can do to reduce what you owe–like filing your taxes on time, making partial payments, setting up an installment agreement, requesting a hardship extension, or negotiating an Offer in Compromise (OIC). So don’t despair; there is hope! Just take things one step at a time and eventually you’ll get that tax debt paid off for good!
About Tax Law Advocates
Tax Law Advocates is a team of federally licensed enrolled agents, tax attorneys, and accountants. Tax Law Advocates helps taxpayers solve issues with both the IRS and state tax authorities. Located in California, Tax Law Advocates is licensed to work on tax issues that occur nationwide. Learn more at https://taxlawadvocates.com
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Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Florida Times Daily journalist was involved in the writing and production of this article.