Understanding IRS Tax Debt
IRS tax debt is a situation that many Americans face every year. As a nationwide tax relief company, Brightside Tax Relief endeavors to help citizens effectively navigate this daunting discourse. Settling IRS tax debt may seem overwhelming, but through careful research, planning, and consultation with professionals, many find it a realistic and achievable goal.
An IRS tax debt occurs when you owe federal taxes from the current or previous years. This incurs penalties and interest, making the debt grow over time. Depending on the amount and length of time the debt, the process can range from relatively straightforward to complex and time consuming. Luckily, there are various ways to settle IRS tax debt.
Organizing Your Tax Records
The first step in the process of settling IRS tax debt is to take the necessary time to thoroughly organize and review your tax records. These details will not only give you a comprehensive understanding of your financial situation, but it also provides vital information when approaching the IRS or applying for tax relief programs.
Specifically, you will need to ensure that you have:
– All of your tax returns for at minimum, the last three years
– Accurate records of your income and expenses
– Documents relating to any significant financial events like selling a home or withdrawing from an retirement account
Analyzing What You Owe
Once you have gathered all of your tax documents, it is now time to deeply analyze what you owe. This step is very important and contributes directly to your ability to accurately settle the IRS tax debt.
Various online tools and resources are available on IRS, that helps to calculate your tax obligations accurately. You should know exactly how much you owe, to whom you owe it, and when it is due.
Exploring the Available Options
With the organized documents and an understanding of what you owe, you will now be prepared to explore various options available to resolve tax debt. Not all options will be viable for everyone — the best choice depends largely on your unique financial situation.
Some of the most common ways to settle IRS tax debt include:
– Installment Agreements: This allows you to make monthly payments towards your debt.
– Offer in Compromise: This is an agreement to settle the debt for less than what you owe.
– Currently Not Collectible: If you can prove that paying your tax debt will cause financial hardship, the IRS may agree to delay collection.
Engaging a Tax Professional
While settling tax debt can feel daunting, remember that you don’t have to go it alone. Engaging a tax professional can remove much of the stress, uncertainty and potential financial risk associated with attempting to navigate IRS regulations by yourself, especially when you are already dealing with a significant financial burden.
Formulating a Plan
Upon establishing a clear path to resolution with your tax professional, the next step is to formulate an effective plan. Such a plan will outline the method you’ve chosen to settle your IRS tax debt, instance, whether through an installment agreement, an offer in compromise or another avenue, providing a step-by-step guide on how to move forward.
Making the Call to the IRS
With a plan in place and a tax professional at your side, it’s time to contact the IRS. Prepare yourself for this – it can be a long and, sometimes, frustrating process. Ensuring you have all relevant documentation to hand and a clear understanding of what you want to achieve from the call will be invaluable.
Following Through With Your Plan
After making the call to the IRS, it’ll be time to buckle down and follow through with your plan. This may mean making regular monthly payments, filing necessary paperwork, and keeping open lines of communication with the IRS.
Settling IRS tax debt does not have to be an unachievable goal. It requires a clear understanding of your financial situation, keen exploration of debt management options and professional guidance from trained tax relief experts. With careful planning and persistence, it’s possible to regain control over your financial future, and break free from the burden of tax debt. Remember, Brightside Tax Relief is your reliable companion in this taxing journey.