4 Strategies for Settling Your Tax Debt
Owing the IRS can be much less intimidating when taxpayers use the right strategies to settle their tax debt. From filing an extension, opting for an installment plan and even declaring bankruptcy, taxpayers have options to get tax debt help when their liabilities are extensive.
Find Solutions with the IRS
Sometimes the easiest way to get tax debt help is through the IRS. The IRS offers installment agreements for taxpayers who owe less than $50,000 in combined taxes, penalties, and interest. While these agreements do have costs, they are typically lower than the costs of other forms of debt.
For taxpayers who just need a bit more time, the Online Payment Agreement application offers 60 to 120 days to pay the tax bill in full. While the borrower will pay penalties and interest with this option, costs are generally fairly low.
Some taxpayers choose to make an Offer in Compromise to settle up with the IRS. While taxpayers must meet certain criteria to get approved, interest and penalties continue to add up during processing, and there is an application fee to get started, many taxpayers are able to save thousands in the long run with an OIC.
Offers Outside the IRS
For some debtors, using a credit card is an option. However, in addition to the interest the credit card company charges, debtors will face a credit card processing fee of between 1.88 and 2.35 percent. Re-financing a home or taking out a short-term loan is another solution for debtors who can afford to make monthly payments, and many loans feature much lower interest when compared with some of the other options.
Taxpayers with insurmountable debt may find tax debt help through filing bankruptcy under certain circumstances. Both Chapter 7 and Chapter 13 bankruptcy can be filed to discharge tax debt if the individual qualifies.
There is no free option to deal with tax debt, and each option has costs and repercussions. Each needs to be carefully weighed to determine which is right for the debtor’s particular circumstances, but tax debt help is available. By pursuing these options, individuals with large tax debts can find a way out.
If you need help with IRS tax issues in Nevada, contact a tax attorney at the Randolph Law Firm in Las Vegas at 702-757-7777 for a free consultation today.