If you are already in tax trouble, check these 9 tax relief tips that can help you get out of it.
Tax Relief Tips | 9 Things to Do to Help You Resolve Tax Problems
1. Deal with Your Mail
The Internal Revenue Service (IRS) has already sent you a bunch of mail. What do you do?
A lot of people make the mistake of ignoring all those letters sent to them. That is the single biggest mistake you can make when you are already in tax trouble.
The very first tax relief tip is to simply open your mail. As daunting as the task may seem, there simply is no other way to face it. Delaying it will only make it worse. Opening the mail, however, will not.
2. File for Taxes Even If It Is Late
The belief that you cannot pay your taxes is simply the wrong mentality. While it may be true, it is not a reason for you not to file.
Filing your taxes late – and even filing without paying – is better than not filing them at all. Penalties for late filing and penalties for late taxes hurt, but filing can help reduce some of the damage.
The penalties you have to pay will depend on how much you owe and how late you are in filing your taxes. Late-filing penalties usually amount to 5% of the tax you owe each month.
That is why the next best tax relief tip to help you get out of trouble is to file. Even if you cannot pay, it will at least help you assess the actual damage.
3. Check If You Qualify for an Installment Agreement
A lot of people do not know that the IRS allows installment agreements for many taxpayers.
The IRS approves installment agreements if the client has filed all tax returns. Additionally, the total balance for all years has to be less than or equal to $50,000. Any more than that and you no longer qualify for the agreement.
If the taxpayer meets those requirements, they are eligible for a streamlined installment agreement. In those cases, the IRS will no longer ask about the current financial situation of the client. They can simply apply for the IRS installment agreement online or via mail by downloading and filling out federal form 9465-FS, Installment Agreement Request.
In these cases, it is advisable that the taxpayer set up their installment agreement for the minimum amount acceptable to the IRS. While many opt for a higher installment arrangement to pay off their debt earlier, there is often a reason behind the delinquent or late payments.
Setting up your payment arrangement in the lowest acceptable amount gives you some breathing room. There are no hindrances or roadblocks to paying what you owe when you have extra money. If an emergency comes and you opted for a lower amount, then you will save yourself the hassle of calling the IRS, explaining your situation, and requesting them to revise your monthly payments.
Ward off tax liens by paying your IRS tax in installments.
4. Look Out and Take Advantage of Amnesty Programs
Amnesty programs can help reduce your tax dues by forgiving part – and sometimes, even all – of your tax liabilities, mitigate penalties, and shorten the statute of limitations.
As much as these programs can really help with tax problems, it is still not advisable to simply wait for them. Depending on where you live, these programs might never come at all. However, before you file or pay, do look out for amnesty programs in case there are any available.
5. Analyze Your Finances to Help You Address Them Better
A lot of taxpayers make the same mistakes over and over. One of the best tax relief tips is to analyze your finances and figure out what exactly it is that you are doing wrong. Making those small changes here and there might just be the key to change moving forward.
Know the right tax deductions you can claim and stop trying to claim the wrong ones. Review your filing status and check to see if it aligns with your circumstances. Be sure to report all your income. Then do a quick calculation of your estimated payments to help you prepare for them.
6. Talk to Your Tax Authorities
As we said in our very first tax relief tip, stop ignoring your mail. Your obligations will not fix themselves if you continue to ignore them.
Contact the IRS and talk to them about your account. Your notice or letter should contain an address and a contact name and phone number. Get in touch with that person immediately since they are probably the most familiar with your account.
If you have lost the notices and letters, try contacting your local IRS office.
7. Try Contacting the Tax Advocate Service (TAS)
In some cases, resolving tax issues can be very challenging. That is where the Tax Advocate Service (TAS) comes in.
The TAS is an independent organization that works inside the IRS. They help resolve issues that taxpayers cannot fix on their own.
8. Act on It
Facing all these tax-related problems can be a real pain. However, there simply is no other way to resolve the issue other than to act on it.
When in tax trouble, do not make excuses. Do not waste both your time and energy looking for people or things to blame. Resolve your problem by getting up and acting on it. Do the right thing.
9. Talk to a Tax Consultant or Advisor
Taxes can be daunting. It is not something most people can easily grasp. Therein comes the role of a tax consultant or advisor.
These groups or people can help you manage your taxes better. They can give you essential advice on tax deductions that can be very helpful for you as you file your taxes. Should you run into tax trouble, they can also help provide solutions for you in a manner that suits your needs better.
Find a tax advisor that understands your situation so that they can help you address it in a suitable way.
Dealing with taxes can be a huge task. Unfortunately, some people simply fail to address them successfully. Should this ever happen to you, try to keep these tax relief tips in mind. Hopefully, they help you if you are ever in any tax trouble of your own.
Do you have other tax relief tips that will help people resolve their own tax problems? Share them with us in the comments section below!