Depending on your situation, there are several ways you could decrease your federal tax debt. For some, simply filing back taxes removes a significant portion of their debt — and it might even lead to a refund. For others, setting up an Installment Agreement makes their debt more manageable, even if it does not remove it. In some situations, you might be able to negotiate an Offer in Compromise and only pay a percentage of your debt. You might also be able to remove your penalty payments or designate yourself as Currently Not Collectible. With so many different ways to take care of your tax debt, you are sure to find one that fits your situation and leaves you free of the stress and burden of your large tax bill.
The close of one year and the start of another is naturally the perfect time to review the past and prepare for a better future. That is why right now is the optimal time to finally take care of your tax debt so that you benefit from starting a new year free of the burden of an unhandled and mismanaged debt.
Stress-Free Start to the Year
Facing collective action from the IRS only brings stress to your life, which is already filled with enough stress, especially during the holiday season. There is no reason to head into the new year with your federal tax debt burden. Rather than continue to worry about how you will pay your debt or whether the IRS will take your house or car, negotiate a tax relief settlement with the IRS. This will remove any current or future collective action, as long as you remain compliant with the terms.
Almost anyone can find a manageable way to pay off their debt without finding themselves in a financial hardship through one of the IRS’ programs, such as an Offer in Compromise, Installment Agreement, Penalty Abatement, or Currently Not Collectible status. Once you start the process, you will find that a huge weight is removed from your shoulders so you can enter the new year stress-free.
Put Your Energy on Other New Year’s Resolutions
The New Year is a time of reflection, which causes many people to come up with a list of New Year’s resolutions to help grow into a better version of themselves. Do you have “be better at handling finances” on your list of resolutions?
Well, check that one off the list by working on settling your federal tax debt. This could be through finding a way to pay it off with an Installment Agreement, selling an asset, or using a personal loan or credit card. You can also apply for one of the tax relief programs or file your back taxes. Make it even easier by working with a tax professional to guide you along the way. Then, you can put your energy into one of your other New Year’s resolutions because you will have your tax debt handled!
There’s a New Tax Code
Congress just passed a huge tax reform bill that becomes law in 2018. Although this will not impact any of your previous tax years or change your tax debt, it does alter your taxes moving forward. The change in the tax code provides the perfect excuse to get any past returns in order before you have to learn about changes to your deductions and exemptions. You can have a fresh start while you work on seeing whether the tax reform will provide you with any relief moving forward.
Don’t Lose Your Refund
Many people who end up with a large tax bill do so because they never filed their taxes in the first place. The IRS files for them using a Substitute for Return, which does not provide any exemptions, deductions, or credits beyond the standard deduction. For many, this leads to a higher tax liability. Filing a tax return can greatly reduce your debt. For some, it even gives them a refund instead. However, there is a deadline for getting your tax refund, which is generally three years. Therefore, if you have any back taxes from 2014, you will want to go ahead and get your file in by April 2018 in order to get the refund.
Additionally, the new tax reform might lead to a larger refund when you file for taxes in 2019 under the new tax code. Any refunds you might get in the future might be automatically applied to pay off any current tax debt you have. Therefore, you want to go ahead and take care of any outstanding tax liability now so that you do not find your future tax refunds garnished to pay your old ones.
Do not wait any longer. Let the fresh start of a new year inspire you to go ahead and take care of your tax debt once and for all. Call the tax professionals at Fidelity Tax Relief to discuss your options. We will work with you to find the best solution for your situation. Then, we work as your advocate to the IRS, negotiating on your behalf to find you the best way to finally get your federal tax debt solved so you have one less thing on your to-do list in 2018.