Do you know what to expect from your tax return? What to do if you owe taxes? If you get a tax refund, then, you’ll have no problem figuring out how to use the money! But what if with all the current changes to the Tax Code you will end up owing the IRS and can’t pay it immediately? You may then ask the question, is there a tax attorney near me?
Many find themselves in a similar situation each year. They filed their taxes and had a life changing event that also impacted the taxes they pay. For instance, one client filed his taxes after buying a condo with money he had withdrawn from his 401K account. Smart or not, he did it not realizing the income tax implications and ended up with a federal tax debt of about 15,300.
There are many reasons for people ending up with a tax debt, but income tax debts are most common for the individual taxpayers.
If you have a Tax Debt, pick your Best Strategy! What to do if you owe taxes:
1. PAY YOUR TAX DEBT IN FULL OR PARTIALLY (Installment Payment Plans)
A plan to pay IRS in installments (original principal balance + interest charged on unpaid amounts). There are different installment plans out there depending on what you qualify for. They range from 120 days to 10 years. Each one has its own characteristics, and charges.
2. NEGOTIATE YOUR TAX DOWN (Offer in Compromise)
You can file an Offer in Compromise to try to settle your tax debt below than what you actually owe. The IRS decides whether to accept your offer of not. Usually, the IRS will accept an offer in compromise if they have a doubt that you could pay in full or if you are not actually considered liable for the tax debt. Negotiating your tax debt down is not that easy and people often resort to contacting tax professionals to handle it so its done correctly.
3. STOP COLLECTION OF TAX DEBT
If you financial situation is dire, the IRS may determine that they can not currently collect from you which they call “Currently Non Collectible”. The tax debt does not go away, and it continues to accrue interest and penalties. Its fine if you can wait out the ten year collection statute of limitations, other wise its less expensive to create a payment plan.
4. DISCHARGING TAX DEBT THROUGH BANKRUPTCY
Filing Chapter 7 or 13 of the Bankruptcy Code is a way to get out of income tax debts, but due to financial consequences you should carefully consider doing so.
In conclusion, to the question Is there a tax attorney near me? The answer is yes and we are glad to be able to assist you.