Table of Contents
Taxes. That word is a drag–and maybe even a subject of dread–for just about everyone. You’re never done paying them and doesn’t it seem like you’re never done with the filing process either?
Are you in trouble with tax debt? Learn how to get tax debt help and get back on track with your finances.
You may not ever love taxes, but you don’t have to fear them or worry about them! Keep reading for our three tips on how to settle your IRS tax debt.
1. Set Up an Installment Plan
Do you have a mortgage, medical bill, or student loan that you pay monthly payments toward? You can do the same thing with your back taxes.
The IRS has a program where you can pay off your tax debt in increments, over time. These are called installment plans.
To the IRS, it’s better to be paid over time and eventually than not to get paid at all. So an installment plan can benefit both parties.
You must, however, qualify for the installment plan program. Not everyone does. For example, you can’t set up an installment plan if you’re more than $50,000 in tax debt.
2. Seek an Offer in Compromise
For some people, they just won’t ever be able to fully pay off their tax debt, no matter how generous the installment plan. You might not make enough money to pay toward your debt and still live (and support a family) day-to-day.
In that case, the IRS sometimes offers a debt reduction called Offer in Compromise. You would provide all relevant information about your income as well as your monthly expenses. They’d also look at your assets, your net worth, and your credit score.
After taking all of that into careful consideration, the IRS would then decide if you’re able to pay monthly installments. If they determine that you can’t, they consider a settlement.
The settlement would be a debt reduction, which you’d be incredibly lucky to get! Of course, not everyone will qualify for Offer in Compromise. But it doesn’t hurt to look into it!
3. Research “Innocent Spouse” Rules
If you’re married or even separated, you can be liable for your spouse’s tax debt. That’s a scary thought for many people!
Fortunately, the IRS has a program for “innocent spouses” who get tricked, lied to, or deceived about their joint tax situation. If your spouse withheld income information or purposely filed your taxes wrong (for example, claimed undue exemptions), you may qualify as an innocent spouse.
In that case, you wouldn’t be entirely liable for responsible for your spouse’s tax debt. Again, not everyone will qualify. Be sure to research the program and its qualifications.
Overwhelming tax debt or an “innocent spouse” issue definitely qualifies as “tax hardship.” Check out this review of Tax Hardship Center. Don’t hesitate to reach out if you have questions or need help!
Don’t Worry, You Can Get Tax Debt Help!
Don’t live as a slave to your back taxes forever! You can get tax debt help.
Look into these three effective tips for paying off your tax debt. You won’t be sorry that you did. And check out our other articles about finance, business, and lifestyle!