Tax Debt Settlement Options and Qualifications
If you somehow find yourself in an unlikely position of owing the Internal Revenue Service (IRS) more amount than you can afford probably, then it is time to be considerate to all available options for your tax debt settlement and repayments. If you are unable to disburse your tax debt settlement within the next 10 years, or the specified collection stature, then the IRS is given the get-go to claim your properties and assets as payment to your debts. For the purpose of avoiding that, you must go for the following options:
- Agreement of Installment: You are able to repay your tax settlement in sets monthly payments. You are given an affordable amount to disburse each each month, until you are able to settle your bills. Unfortunately, you will be wasting more money due to the fact that there are penalties and interest to consider. Though this is one of the most famous methods utilized by taxpayers, it even takes them longer periods of time to fulfil their payments.
- Disbursing in Full: If you can somewhat disburse in full, then this is the best choice for you. If you are not having the cash, then you can raise funds by means of help from your friends, family, and other financial institutions. By paying in full, you are eradicating the probability of more charges and penalties resulting; a small unpaid amount could collect to a large burden forming a harder tax debt settlement arrangement.
- Credit Card: If your credit limit can handle your IRS tax settlement amount, or if you can live with your credit card’s interest, then you can make use of your credit card to disburse off your existing IRS tax debts. Unlike the IRS, credit cards cannot impose deductions on your wages, or to levy against your bank account.
- Offer in Compromise (OIC): Among the four choices, this is perhaps the most attractive one, particularly if you do not have the means to repay the accumulated debt. Few people are eligible for an OIC. To be one of them, you ought to meet one of the following criteria:
- Cannot Pay: If it is confirmed that you cannot pay your tax debt settlement within the collection stature, file for an OIC under cannot pay. The IRS reviews your capability to pay, considering every factor like health and age.
- Unaccountability: If you can somewhat prove that you are not liable for the debt accumulated, then you can file for an uncertainty as to liability.
- Economic Hardship: If unseen forces suddenly limit you from working, such as sudden disabling and serious illness, natural disasters, among many others, you will be given an offer. Offers are plans that diminish the total debt, which in turn saves you more money. Once you are made an offer, the IRS tax debt is cleared.
- Not Collectible: The IRS makes an agreement to a permanent or temporary release of its collection, depending on your circumstances. If you are not having the means to pay, then you cannot pay at all cost.
If you believe you qualify for any of the tax debt settlement repayments above, then you do not have to hesitate to contact tax debt experts around their opinion. Now you do know that you do not have the suffering for the accumulated interest and penalties. You can now find how you can take charge of the situation, and turn your IRS debts around.
Choice of a Tax Software Program
Each year brings millions of people relying on professional tax preparers to organize their taxes. These professional tax preparers may be in the form of CPAs and tax agencies. Though these professionals reduce the risk of mistakes and any discrepancies in the report, their charges are often somewhat expensive. Due to this, many people opt for filing their federal and state tax returns on their own. Though the traditional way to prepare taxes is in the course of paper tax forms, some citizens now rely on tax software programs in preparing their taxes and submitting it electronically to the state and federal taxing agencies.
Similar to all software programs, each software, each software has its advantages as well. To sum up, software programs enable taxpayers to prepare their taxes in an efficient and orderly manner. The most popular types of tax software is inclusive of Turbo Tax, TaxAct, and TaxCut, among many others. Each program offers several versions such as standard, deluxe, and a premium version. Each software offers diverse features and services; however, all of them contain federal income tax return forms. Depending on the software version, it can contain both the state and federal income tax return forms. There are even versions which can assist in tax deductions and credits for bigger tax savings.
Advantages of Tax Software Programs
The user friendly tax software caters to all. These programs usually offer step-by-step processes which give taxpayers the opportunity to finish preparation of their taxes in half the time than it takes on a traditional written method. The software even enables taxpayers to transfer the data from a state tax return to a federal return. This saves time in filing, as well as assures the consistency of the information, since both forms contain the same data.
Most users comment on how they are able to save more money in using tax software programs than by listing down the services of professionals. Preparers of tax charge quite often beyond $100 for the preparation of a citizen’s tax return; tax software programs range are often free, and if the user wants better versions, then these programs are accessible for $60 or more.
Best Suitable Tax Debt Repayment Method
Somehow, if you find yourself in an unlikely position of owing the Internal Revenue Service (IRS) more money beyond your probable affordability, then you must consider all available options for repayments. A cautious word: if you are not able to disburse within the next ten years, or the specified collection stature, then the IRS is given the get-go to claim your properties and assets as payment to your debts. If you want to avoid that, refer above to some of your options.