Are you one of the thousands of Americans who owe back taxes? Or, are you worried about the upcoming tax season and where you will find the funds to pay the taxes you will owe? If you are not in a financial situation where you can pay your taxes in a single lump sum, you may qualify for a tax relief program with the IRS.
While tax relief programs will not completely eliminate the taxes you owe; the IRS will sometimes allow you to make payments or eliminate a portion of your tax debt. Qualifying for these tax relief programs is best done with the guidance and assistance of a tax professional.
The federal government offers a few tax relief programs to citizens experiencing financial hardship or extenuating circumstances. The Fresh Start Initiative allows for extensions, payment plans and offer in compromise. For individuals making less than $100,000 per year, with a tax debt less than $50,000; the IRS allows for penalty relief and a six month extension on taxes.
This option is great for those that need just a little extra time to pay federal taxes. If you need longer to pay off your tax debt, you can apply for installment payments. Generally an individual will need to have less than $50,000 in back tax debt, be able to make minimum payments of $25 each month, and plan to have the full amount paid back in six years.
An Offer in Compromise can eliminate some of your back taxes due; financial hardship must be demonstrated and the application process can be complicated. The IRS will analyze your income and liquid assets to determine how much of your back tax debt they determine you are able to pay. An Offer in Compromise can also be combined with an installment plan once you have settled on the amount owed.
There are also other tax relief programs offered by the federal government. Innocent Spouse Relief is available to divorcees who may have tax discrepancies or under reported income during the time they were married. Income averaging relief is also available to those whose income varies from year to year. In this program, the IRS uses an average of your past income to determine your current year tax liability.
In addition to federal tax relief programs, many states and counties offer relief programs to homeowners, veterans, seniors and others experiencing financial hardships. Contact one of our qualified specialists today to learn more about the tax relief programs that you may qualify for in your area.