How To Handle a Tax Bill You Can’t Pay
How To Handle a Tax Bill You Can’t Pay
What could be more chilling than receiving a notice from the IRS that you owe a huge tax bill? The answer: the realization that you don’t have the money to pay off said tax bill. So what should you do if you find yourself in this situation? There is hope.
First off, never ignore such a situation and just hope that it will go away. That won’t work. Instead, face it head on. A good place to start is to contact a tax professional. The IRS does offer several options for people in this situation, but you might not know which is the best option for you. Therefore, meeting with a tax pro is usually a good idea.
The IRS actually offers several payment options for taxpayers in the hole, if they qualify. You can go ahead and pay it off directly from your bank account via IRS Direct Pay. You can also petition the IRS for an installment agreement wherein you agree to pay off the debt monthly. You can request an offer in compromise, as well, which if accepted could lower the amount you have to pay back.
However, as mentioned you must qualify for this option and part of that includes having debt and penalties of $50,000 or less, combined. No matter which payment method you choose you should do everything you can to pay off your debt in full as quickly as possible. The longer you delay payment the stiffer the penalties and the interest will get
Want to learn more? Contact us
Follow GROCO on Facebook
Making Your Medical Deductions Count
Making Your Medical Deductions Count April 15th is almost here and if you are owing tax it may pay to take a second look at that return to see if you claimed all medical deductions you are entitled to. Your diligence in keeping track of expenses will pay off. IRS Publication 502 has a complete listing…
GROCO Warns of Common Tax Filing Mistakes
GROCO Warns of Common Tax Filing Mistakes Tax return anxiety is on the rise as the federal tax filing date looms. The prospect of filing an erroneous return increases as more rely on tax software to help prepare their returns. For the week ending March 28, more than 10,000 electronic returns were filed from home…
Loss on Sale of 1244 Stock
Have you considered a loss on sale of 1244 stock as a tax strategy? Ordinarily, a loss on a sale or exchange of stock is a capital loss. Capital loss treatment is generally less advantageous than ordinary deduction treatment because of the fact that a capital loss recognized by an individual is applied, first against…
Section 213 Medical, Dental, etc., Expenses
Section 213 Medical, Dental, etc., Expenses (a) Allowance of deduction There shall be allowed as a deduction the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent, to the extent that such expenses exceed 7.5 percent of adjusted gross income.…