Paying taxes can seem burdensome to a lot of people, especially if they don’t have a lot of money to begin with or they’re self-employed and must pay the employer and employee portions of their federal tax. Some people end up unable to pay their taxes, and they find themselves in debt to the IRS.
Reducing the debt from taxes is very important for these people and others because the interest can get out of hand quickly. The IRS also creates many penalties for those who don’t pay their taxes on time and these add up very quickly. The best way to avoid these kinds of problems is to pay taxes in full and on time, every time, but sometimes that’s just not possible.
Generally there are payment plans and other terms that can be worked out, but these can involve a long time to pay back debt. Some people get lawyers or tax professionals to help them, too, so they can try to reduce the amount they owe. This can be done in some cases, depending on a person’s individual circumstances.
Reducing IRS Tax Debt Means More Financial Freedom
Many people are concerned about dealing with the Internal Revenue Service, so they put off talking about the struggles they’re having when it comes to paying their taxes. This is an unfortunate thing, because the IRS is an organization, and it’s simply doing it’s job. As a government body it’s not out to get people.. It’s not trying to cause problems for average Americans. It’s only interested in conducting its business as it should, and that includes working with people if they really need help.
There have been a lot of stories told about the IRS, and a lot of them really don’t have much accuracy. There may be some truth to some of those stories, but they often end up with a satisfactory resolution instead of the despair that’s more commonly mentioned.
The main tax goal of most people should be not to accumulate IRS debt in the first place. If they don’t owe the IRS any money, there won’t be anything to worry about. Another issue, primarily for people who already owe money to the government, is how to reduce this debt so they can avoid problems with the government in the future.
Tips to Reduce IRS Debt and Tax Stress
A study from the American Psychological Association indicated that taxes are one of the main stressors for most people, and can have a big impact on psychological health. By learning to better manage this kind of stress, people can lead healthier and more resilient lives. One of the ways they can manage that stress is to follow these tips from the IRS:
- Putting off taxes until the last minute is never a good idea, so don’t procrastinate.
- If unsure about a law or a regulation, find what’s needed on the Internal Revenue Service Web site.
- Filing electronically is both fast and accurate, and when it’s done that way the refund gets to the bank a lot faster, as well.
- If the taxes that are due can’t be paid, panicking won’t help. Take a deep breath. Contact the IRS. Working out an extension or a payment plan is possible.
- When given an extension of time to file a return, it’s still important to pay on time. Interest will be accruing, and if 90 percent of the taxes due aren’t paid before the extension deadline, there will also be late fees. Always pay taxes as soon as possible.
Between the interest and the penalties, it can become very difficult to reduce IRS debt if it’s not handled right away, and people who’re already in IRS debt may need accountants to help them out. It can take a long time for these people to straighten out their lives and feel financially safe again, but it can be done. Lawyers and others who can help can even be found online, making it very convenient.
The same sense of urgency in getting help should also be true for people who’re about to get into problems with their taxes, and who see those problems coming. Relying on tax programs or doing their own taxes isn’t a smart move for people who’re already in trouble with the IRS or who’re about to be. They can lower their stress levels by looking online and in their local area to find a qualified tax professional to help them.