While the number of IRS tax liens filed annually has fallen nearly 50% in recent years, very many taxpayers are still lumbered with significant tax debt.
Dealing with tax debt can be frustrating and overwhelming. It’s especially difficult when you are unsure about the best way to deal with it. In this blog post, we will discuss 5 tips that will help set things right for your business and make life easier for you!
- Understanding the steps you can take to reduce tax debt can help prevent possible legal penalties and other repercussions that a financial institution has.
- Get realistic about your financial situation, and don’t let the idea of debt go unchecked.
- If the debt is manageable, you can do everything yourself. If not, you might need a lawyer’s help.
Millions of Americans continue to struggle to pay their taxes—despite one of the longest-running economic expansions on record over the last decade.
If you’re in the boat of owing taxes, it is not the end of the world. There are steps you can take to reduce or eliminate the impact on your life and finances. Learn about five tips that could help lessen your tax debt burden.
Tip 1: Don’t ignore the problem.
Even if you can’t pay what you owe, file your return on time (if possible) or file for an extension. The late filing penalty is 5 percent of the tax owed per month up to a maximum of 25% of the balance; there is also an underpayment penalty of 0.5% to 1% per month of the balance owed, also up to 25%. If you don’t file your return or make any payment on your obligation, your tax debt will grow rapidly.(Clarify and cut out unnecessary detail).
Juggling new loans with your old tax debt is a daunting challenge. But if you take care of the IRS first, it will be easier to pay off other debts later.