Navigating Tax Debt
Managing tax debt to the IRS can be quite challenging to navigate. The experts at Optima Tax Relief break down some helpful tips and share advice on how to manage your outstanding tax debt.
While many Americans look forward to the end of tax season as they anticipate receiving their tax refund, many others are left owing money to the IRS. Receiving a tax bill from the IRS can be nerve-wracking and stress inducing but being proactive about understanding your options (and implications) related to your tax debt can go a long way to reduce that stress. The experts at Optima Tax Relief provide a breakdown of some of the key considerations you should know about when planning to pay off your IRS tax bill.
photo/ TaxRebate.org.uk
It is critical for taxpayers who find themselves in debt to the IRS to act swiftly. By paying off your IRS bill in a quick and expedient manner, there are a host of other issues you can mitigate. From daily compounding interest to late payment penalty fees, your tax bill will continue to grow if not taken care of quickly. The failure-to-pay penalty can amount to up to 25% of your tax bill, so putting off payment will mean more money owed, and this amount can continue to grow until the debt is paid in full. The IRS will first apply any payments made to the actual tax amount, followed by any penalties incurred, and interest accrued.
One tool that is available to taxpayers is an installment payment plan made directly with the IRS. By enrolling in an installment plan through a tax resolution expert like Optima Tax Relief or directly through the IRS,, you may be able to decrease the failure-to-pay penalty amount, as well as activate other cost-reducing benefits by enrolling in an automatic payment program.
Although many Americans take advantage of late filing, it is important to be aware that by doing so, you may also incur failure-to-file penalties. If you are thinking about filing late or anticipate having to manage through a tax debt, consulting an expert can also go a long way to ensure you aren’t setting yourself up to incur additional fees on top of your tax bill.
Author: James Daniel
