TEN TIPS FOR TAXPAYERS WHO OWE MONEY TO THE IRS

No one likes to pay taxes and it seems to be more painful when you cannot pay the amount you owe to IRS in one payment.

The IRS has announced an effort to help struggling individuals and businesses meet their tax obligations without adding unnecessary burdens.

    1. Get a loan if possible to pay your tax bill, it is cheaper than paying installments.
   
    2.  Ask for additional time to pay. If you can pay the amount in one payment but do not have the money  
        readily available you can call 800-829-1040 or go to www.irs.gov.
   
    3. You can pay by credit card if you get reward credits this may take some of the pain away knowing you  can use those reward credits for something you want. However, there are fees involved and the interest may not be deductable.

    4.  You can pay by Electronic Funds Transfer. The amount would be deducted from your bank account using the Electronic Federal Tax Payments System. You can access this by calling 800-555-4477 or online at www.eftps.gov.

    5.  Installment Agreement. You can request an installment agreement to pay a certain amount each month but you must have all tax returns filed and be current with any estimated tax payments

   6.  If you owe 25,000 or less you can request an installment online at www.irs.gov.

   7.  You can use form 9465 to request an installment. After filling out the form you mail it to IRS and in    about 30 days IRS will let you know if it is accepted or not.

   8.  If you owe more than 25,000 you will need to complete form 433F Collection Information Statement before IRS considers your request for an installment agreement.

   9.  If the installment agreement is approved there will be a user fee depending on your income and which option you choose it can be $43, $52 or $105.

  10.  Taxpayers can also have the amount they owe taken from their paychecks by adjusting their W-4, Employee Withholding Allowance Certificate to have more tax withheld.

Comments

Post a Comment

Popular posts from this blog

What is Fair in the Tax System?

                 Everyone wants to be treated fairly. That is an essential quality that all people have. But what is fairness? Trying to answer that question can prove to be difficult for some. While fairness is impartial and just treatment without favoritism or discrimination, applying this principle is a challenge. Each person has their own idea of what is fair. That is certainly true when it comes to the current tax system.           The Internal Revenue Service ( IRS ) is aware of that sentiment. After a year of review following the passing of the 2022 Inflation Reduction Act funding, they are determined to make a change. These changes will focus attention on the wealthy, partnerships, and other high-income earners who in recent years have had a sharp reduction in audits. The IRS is planning to use Artificial Intelligence to detect patterns in tax avoidance and new threats. They will also make sure that audit rates do not increase for modest earners. This is just one area that i
Read more

What is the Educator Expense Deduction for 2023?

            With the start of the new school year upon us, educators will want their students to have a complete classroom available to them. That might mean having some out-of-pocket expenses that are not reimbursed. If that’s the case, any principal, counselor, aide, or teacher who works at a K-12 school for at least 900 hours in a year can claim the Educator Expense Deduction . The current limit is $300, but that can be adjusted in the future based on inflation.           The qualifying costs can be related to books, supplies, and other materials used in the classroom. Equipment, including computer equipment and software can qualify. COVID-19 protective items used in the classroom would also apply. This can be claimed even if you use the standard deduction on your tax return. As a reminder, it is always best practice, especially when claiming a deduction, to keep good records which would include receipts. Your qualified tax professional can advise you further.
Read more

Beware of Employee Retention Credit Scams

          The Employee Retention Credit ( ERC ) is a tax credit for employers who kept paying employees while closed by government order or had a great decrease in income due to COVID-19. This is a credit that can only be claimed by certain businesses and organizations that had employees during specific time periods. With this set of criteria, the ERC is continuing to be the subject of a growing advertising campaign. Wild claims are being made about who can qualify for it.           The eligibility requirements should be considered closely. One sign of a scam is stating that the application process is easy, or that someone can find out if they are eligible for it in minutes. The ERC is noted for being a very complex credit. Scammers are trying to use this situation to steal personal information or run away with large upfront fees for work that will never take place. Dishonest promoters try to lure in victims by offering to work for a fee based on a percentage of the credit or sayin
Read more