The short answer to the title of this piece is a resounding “yes” you definitely have options even if you currently do not have enough funds to pay the money you owe in taxes. In this blog, we will discuss the various options available to you when it comes to taking care of any tax debt.
How Do You Know You Owe?
You are probably reading this blog because you have some concern about whether you have enough savings to cover your tax debt this year. As a threshold matter, let us dig deeper into this tax bill concern. Are you just thinking about tax time as we start the new year and are beginning to stress that you may not have enough? Do you just have some small “gut feeling” that you owe taxes and funds might be tight this year? Or, have you already done your taxes and you know the amount you owe?
We ask this question because sometimes fear and trepidation get the better of us. In some cases, we get so wound up thinking about the possibility of something occurring that it almost becomes a reality.
So, if you are only concerned about a tax debt, or simply have a “gut feeling” with no numbers to support your fear, then take a deep breath. You should only really start to worry when you know there something to worry about.
Because we all need to file our taxes at some point, it is wise for you, if you have any type of fear about paying a tax bill, to do your tax returns sooner rather than later. The benefits of doing taxes early are threefold:
1. You know where you stand. You have hard numbers that will dictate what you need to do next.
2. You might be pleasantly surprised. You may not owe much or may get a refund. You have just saved yourself weeks of stress and fear of the unknown.
3. If you do owe a substantial amount, you are way ahead of April 15, so you have time to figure out what are the best options for you.
When it comes to finding out what options you have with large tax debt, it is best to get help from a tax professional. Consider talking to an experienced tax law firm in Sarasota, Florida about your own tax situation. If the Internal Revenue Service (IRS) has sent you a notice, we invite you to call the tax attorney of Florida, Mary E. King, P.L. The Law Office of Mary E. King, P.L. can make sure that your tax issues are resolved efficiently and at the lowest cost to you. Please fill out our online contact form, or call us at 941-906-7585 today.
Options If You Don’t Have Enough Money to Pay Your Tax Debt
Once you have all the facts, and you know that you need to pay a substantial amount to the IRS, there are options available to you if you cannot pay what you owe in full.
1. Short-Term Payment Plan
Taxpayers may ask for up to 120 days (4 months) of time to pay their debt. For many taxpayers that may be just enough time to pay everything in installments. Fortunately, there is no fee applied to a short-term payment plan.
2. Longer-Term Installment Agreement
You may also ask for a longer-term monthly payment plan, also called an installment agreement. If you owe less than $10,000, you may be able to apply online for an installment agreement with the IRS, though you need to pay 9% interest on that tax debt (for 2019) and must pay off the debt in three years.
If you owe less than $50,000, you may be able to enter into an installment agreement over six years. You would be wise to consult with a tax professional, however, before dealing with the IRS directly.
3. Offer in Compromise
In some cases, you may be able to settle your tax debt for less than the full amount that you owe. That is called an “offer in compromise.” This is a good deal if you can obtain it, but not everyone qualifies for such an offer. Again, working with a seasoned tax law firm in Florida will help you figure out whether an offer in compromise is even possible.
4. A Loan to Pay Your Tax Debt
While it is never a great option to trade one debt for another, you may find that you will save money by getting a loan to pay your tax debt. Indeed, if the interest you would pay on an installment agreement with the IRS is higher than the interest you would pay on a loan (or even a credit card), then you may want to consider using the loan to pay your taxes.
Overall, Do Not Ignore the IRS
Regardless of how much you owe, it is never a good idea to simply not file a tax return. Working with the IRS to obtain an extension or settle your debt is far better than the risk you take for not filing at all.
Talk to an Experienced Tax Law Firm in Florida for Help
Taxes can be a challenge, bringing you a great deal of stress. Of course, that stress is compounded when the IRS sends you a notice of some issue or notifies you that you will be audited.
In the event, you owe more than you can pay, or if you are audited, you need to talk to a tax law firm in Florida that can help. Mary E. King has spent her career concentrating on tax law and can help you with tax audits in Florida and elsewhere. Attorney King has a wealth of information about what types of options would make the most sense for you and your business.
That helps explain why her tax law firm in Florida received an A+ rating from the Florida Better Business Bureau. If you have a tax-related issue – no matter how small or how large – setting up an initial consultation with Mary E. King, tax attorney of Florida, is the first step you should take towards relief.
The Law Office of Mary King P.L. offers complete IRS problem-solving services including all areas from tax debt settlement to planning the most efficient tax strategy for individuals and businesses. Call us today to schedule an initial consultation. With years of experience as a tax law firm in Florida, Attorney Mary E. King can make sure that your tax issues are resolved in your favor. Fill out our online contact form, or call us at 941-906-7585.