As we approach the start of April, Tax Day is quickly approaching, and many Americans still need to file their taxes in the coming weeks. According to the IRS, around 78.8 million tax returns have been received so far, which is slightly lower than the 79.6 million received at this time last year.
If you haven’t filed your taxes yet, don’t worry – you still have a couple of weeks until the April 15 deadline. It’s important to remember that you must both file your federal tax return and pay any amount you owe by this date. Failure to do so can result in additional tax costs.
For taxpayers who owe balances, there are several options available to repay the IRS, including payment plans and forbearance programs. However, it’s essential to be cautious of companies that promise to settle your tax debt for a lower cost than you owe. These companies often make promises they can’t guarantee and offer services that can be obtained directly through the IRS.
The Fresh Start program, launched in 2011, was designed to help struggling taxpayers pay back taxes and avoid tax liens. The program expanded the offer in compromise (OIC) program to include taxpayers earning up to $100,000 who owe less than $50,000. An offer in compromise allows eligible taxpayers to settle their debt with the IRS for less than the amount owed.
Additionally, the Fresh Start program increased the dollar amount taxpayers must owe before the IRS files a lien against their assets and property. Taxpayers owing less than $25,000 may request a lien withdrawal after entering into a direct debit installment agreement.
To qualify for an offer in compromise or lien withdrawal, taxpayers must meet certain eligibility requirements. Offers in compromise can be submitted online to settle tax debt at a lower amount than owed. Direct debit installment agreements are also available for taxpayers who owe $50,000 or less and have filed all their returns.
If you’re unable to pay your full tax amount, there are other options to consider, such as a short-term payment plan, long-term installment agreement, or placing your account in “currently not collectible” status. Personal loans or 0% APR credit cards can also be used to pay taxes, but it’s essential to have a repayment plan in place to avoid accruing additional fees and interest.
Overall, it’s important to explore all available options and choose the best solution for your individual tax situation. By understanding the IRS programs and requirements, you can effectively manage your tax debt and avoid potential consequences.
