Falling behind on taxes is a common problem, but it’s important to take action to resolve the situation as soon as possible. The longer you wait, the more difficult and expensive it can become to settle your tax debt. Here’s a guide to repaying your tax debt to the IRS:
Understand Your Options
- Payment Plans: If you cannot pay your tax debt in full, the IRS offers several payment options, including short-term payment plans, long-term payment plans, and instalment agreements. If you are unaware of prominent tax laws, you can consult with an expert (including the best tax attorney in Los Angeles).
- Offer In Compromise: If you cannot pay your tax debt in full and do not qualify for a payment plan, you may be eligible for an offer in compromise. This option allows you to settle your tax debt for less than the full amount owed.
- Currently Not Collectable Status: If you are experiencing financial hardship and cannot pay your tax debt, the IRS may place your account in a currently not collectable position, temporarily suspending collection action.
Gather Necessary Documentation
· Financial Information
The IRS will require information about your financial situation, including your income, expenses, assets, and liabilities, to determine the best repayment option. Hiring a tax professional (including an IRS audit lawyer in Los Angeles) can help you file pending taxes.
· Proof Of Payment
If you make payments through a payment plan or instalment agreement, you’ll need to provide proof of charge to the IRS.
· Tax Returns
The IRS requires you to file all the necessary tax returns if you have outstanding tax debt.
Stay Current with Your Taxes
· File And Pay On Time
To avoid future tax debt, filing your tax returns and making required payments on time is important.
· Review Your Withheld Taxes
Regularly review the amount of taxes being withheld from your paycheck to ensure that you pay enough to cover your tax liability.
· Keep Records
Maintain accurate records of your income, expenses, and taxes to report all required information accurately.
Work With A Tax Professional
· Navigate The Process
A tax professional can help you understand your options for repaying your tax debt and guide you through the process.
· Representation
A tax professional can also represent you in negotiations with the IRS and advocate on your behalf. Tax professionals (like tax attorney in Los Angeles) have been doing these jobs for years and can guide you in the right direction.
· Avoid Mistakes
A tax professional can help you avoid common mistakes and resolve your tax debt correctly.
In conclusion, owing money to the IRS can be a stressful and overwhelming situation, but it’s important to take action to resolve the problem as soon as possible. Consider your options, gather necessary documentation, stay current with your taxes, and consider working with a tax professional to achieve a successful outcome. By taking the right steps and seeking the help you need, you can repay your tax debt and return to financial stability.
