Tax Payment Plan
If you owe money to the IRS, and you’re not able to pay the debt, you might be able to set up a tax payment plan. You can always work something out, but you should never ignore the problem. Doing so could cost you more in the long run.
What Can Happen If You Don’t Pay
If you owe more than what you are able to pay, there is one thing you have to consider. If you choose not to pay, several things can happen, and none of them will benefit you.
The IRS has a lot of power when it comes to collecting money. They have the ability to do the following:
- Put a lien on your home
- Freeze your bank accounts
- Seize tax refunds for which you may be eligible
- Garnish wages
All of these actions can have a negative impact on your credit score, and they can ruin your financial future. You may not be able to buy a home, buy a car, or even get a credit card. So, you have to know your options, as it can protect you from financial ruin.
Options for a Tax Payment Plan
If you’re not able to pay what you owe, you might be able to work out an agreement. But it’s important to know your options. The first step is to determine exactly how much you owe, because it will determine what you may be eligible for.
The IRS will accept a tax payment plan if you owe $10,000 or less, but they must first determine if you’re able to pay them in full.
There is a fee for this service, which depends on how much you owe. But it’s usually around $40 – $100.
If you owe $25,000 – $50,000, you can do an offer in compromise. You agree to pay less than what you owe, but not everyone can qualify. There are several factors that will determine your eligibility. Some of these can include, but may not be limited to:
- Your ability to pay
- Your annual income
- Your annual expenses
- Your assets and the equity associated with them
The IRS will approve it if they determine that it’s the most you can pay in your current financial situation. There is a $150 filing fee for this option, so make sure you go through their pre-qualification process before you apply.
Hiring a Professional to Set Up a Tax Payment Plan
If you’ve ever dealt with the IRS, you know how stressful it can be. Swimming through a sea of forms and regulations can leave you frustrated and confused. That’s why you need to find a professional to help you sort through it.
It’s always a good idea to do your due diligence to see if their running a sound operation. It’s not always a sure-fire way to keep you from getting burned, but it’s a step in the right direction. You can also ask friends and family if they know someone they can recommend, but even then it’s a good idea to do your own research.
Be sure to shop around before you make a decision. Look in the phone book to see who is working in your area, and there are many online resources that can help you as well. Contact as many people as you can, and compare their rates. That way, you can find the best price for your budget.
You should remember that not all tax professionals are created equal. One might only specialize in one area of taxation, while someone else might focus on another. That’s why you need to be clear about your needs, so you can find the right person to help you.
If you ignore this problem, it could cost you thousands. That’s why you need to let GLG Accounting help you put together a tax payment plan. We can give you the best options for your specific situation, and we can help you put that debt behind you.
Just get in touch with us to schedule your free consultation. We would be happy to hear from you!