Once again, tax season is among us, and the time for filing your federal tax forms is drawing near.
Once again, tax season is among us, and the time for filing your federal tax forms is drawing near. Paying your tax payment and any back taxes you may owe is another requirement of this.(Photo : by Kelly Sikkema / Unsplash)
Paying your tax payment and any back taxes you may owe is another requirement of this. According to the IRS, back taxes, also known as overdue taxes, affected an astounding 9.3 million Americans in 2022 alone. Luckily, there are solutions available if you find yourself in this situation. We'll go into depth below about how professionals advise you to approach your tax obligations and succeed.
We have included some of the most effective strategies for eliminating back taxes.
Look for Tax Breaks
Tax relief firms provide several useful services. They will deal directly with the IRS and assist you in resolving your debt, setting up a payment plan, halting wage garnishments and collections, and occasionally even obtaining the waiver of late fines and penalties.
However, there are costs associated with these services. However, Paul T. Joseph, a certified public accountant and the proprietor of Joseph & Joseph Tax & Payroll in Williamston, Michigan, believes that "depending on the amount of the liability, it may be worth it."
Compare prices from several companies before selecting one, and steer clear of any business that demands money in advance. If they are effective in addressing your tax concerns, you should pay.
If the IRS determines that your tax burden is too great, it has many options. One option is to ask for an installment plan, which enables you to gradually spread out the cost of your tax obligation.
Another option is to present the IRS with an offer in compromise, which is effectively a negotiation. It enables you to pay off your debt in whole and in one go, even for less than you presently owe. If the IRS determines that paying your whole tax obligation will "create financial hardship," you have this alternative.
If you are unable to pay your tax due, the IRS provides a comprehensive list of options along with the necessary documents to pursue them.
Call In a Tax Expert
Another way is to call in a tax expert, such as a CPA or tax preparer. They can assist you in filing your tax returns for this year and offer advice on handling your outstanding bills. They can also guide you through some of the most challenging procedures used by the IRS, such as offers in compromise.
"There are programs that will help the taxpayer in need, but they are not always easy to navigate," states Morris Armstrong, the founder of Morris Armstrong EA and an IRS-enrolled agent. "The tax world is complicated." "A professional can help."
Request the Status of "Currently Not Collectible (CNC)"
Your last resort is to ask the IRS to designate your tax debts as Currently Not Collectible (CNC). While the debt is still there, at least until your financial situation improves, this means the IRS won't be pursuing collection on it any time soon.
You must submit documentation of your financial situation, including details about your assets, income, and outlays, to do this.
Just remember that interest and penalties on your debts will still accumulate even after you receive CNC status. In the long term, this will only increase your tax obligations.
