Taxes Owed : 7 Tried-and-Tested Strategies to Settle
- Posted by Joshua Sells
- On August 3, 2023
- IRS Back Taxes, IRS Tax Attorney, IRS Tax Debt, IRS Tax Relief, Offer in Compromise, Tax Settlement
Are you feeling stressed about the taxes you owe to the IRS? Don’t worry! In this blog post, we will walk you through seven tried-and-tested strategies to settle your taxes owed in record time. Whether you are new to the concept or familiar with the topic, these strategies will help you navigate the process with ease and turn your stress into success! So let’s get started on the path to financial peace of mind.
1. Gather All Necessary Information for your Taxes Owed
Before diving into the process of settling your taxes owed, it’s crucial to gather all of your tax documents such as W-2s, 1099-MISC forms, and any other relevant documents that detail your income and expenses throughout the year. If you are self-employed it is vital that you keep good records of your expenses throughout the year. Those expenses and deductions will help reduce the amount of taxes owed.
By ensuring you have all the essential paperwork in one place, you can save time and avoid unnecessary stress. Organization is a major stress reliever when tax filing time comes around.
2. Determine Your Tax Liability
Once you have all your documents in order, it’s time to determine your tax liability. Start by calculating your total income and deducting any applicable exemptions, deductions, and credits. This is where contacting a professional tax attorney or accountant can be very beneficial. Most people are unaware of all of the deductions and credits that they can claim. Seek the experts advice to reduce your tax liability.
Some examples of deductions you want to remember are: home office, mileage, marketing, advertising, utilities, supplies, insurance, and contractors.
You want to make sure that your tax liability is calculated accurately. Consider reaching out to a tax professional or using tax preparation software. These resources can give peace of mind and ensure you don’t overlook any crucial details.
3. Explore Payment Options
Now that you know the amount you owe, it’s time to explore payment options. The IRS offers various methods for settling your taxes owed, allowing you to choose the one that best suits your financial situation.
One option is to fully pay the taxes owed by the tax deadline. This option is a great way to save you from accruing penalties and interest. If fully paying the taxes owed is not a feasible option for you, the IRS offers installment agreements, which allow you to make monthly payments over a set period of time. The time periods are determined by the amount owed and the remaining statute of limitations on the taxes owed. Each tax debt has a ten year statute of limitations from the time that it was filed.
Additionally, you may qualify for an offer in compromise, where the IRS agrees to settle your tax debt for less than the full amount owed. The IRS uses a mathematical formula to determine that amount that you can pay based on your income, assets, and household size. Keep in mind that qualifying for this option can be challenging, so it’s essential to explore all possibilities and consult with a tax professional.
We had a client who owed the IRS over $900,000.00. After going through all of his assets and a full financial analysis we were able to determine that he would be a great candidate for the Offer in Compromise program. When it was all settled we were able to settle his $900,000.00 tax balance for $13,600. Most people would say there is no way that could be possible, but it is all about the qualifications. That is why it is so important to seek the advice of a professional when it comes to these types of situations.
4. Communicate with the IRS
Open lines of communication with the IRS are crucial when dealing with taxes owed. If you’re unable to pay your taxes in full by the deadline or need assistance with a payment plan, don’t avoid contact with the IRS. Getting ahold of the IRS on the phone can be a very difficult process. Creating an IRS account online is a good place to start to be able to get your tax information.
When reaching out to the IRS you want to be honest and specific with your situation. The IRS does want to work with you and help you resolve your tax situation. Being kind and patient will go a long way with them. Go to www.irs.gov for IRS contact information specific to your location.
5. Seek Professional Advice
Navigating the complexities of taxes owed can be overwhelming, especially for those unfamiliar with the process. Seeking professional advice can be invaluable in ensuring you make informed decisions and avoid unnecessary complications. Professional advice can save you valuable time and money when it comes to dealing with taxes.
Consider consulting a tax attorney or a certified public accountant (CPA) who specializes in tax matters. They can provide expert guidance tailored to your specific situation, helping you understand your options, minimize tax liabilities, and ensure compliance with relevant tax laws.
6. Stay Organized and Keep Records
As you work towards settling your taxes owed, it’s essential to stay organized and keep records of all transactions and communications related to your tax payments. This includes copies of tax returns, payment receipts, and any correspondence with the IRS.
Staying organized not only helps you keep track of your progress but also serves as a valuable resource if any issues or discrepancies arise in the future. By maintaining detailed records, you can easily reference information and provide evidence as needed.
7. Plan for the Future
Finally, once you have successfully settled your taxes owed, it’s crucial to plan for the future to avoid finding yourself in the same situation again.
Start by reviewing the methods you used last year and determine which ones were helpful and which ones were not. Being well organized with your expenses is going to be key to making sure you are getting your proper deductions. By taking proactive steps to manage your finances, you can stay ahead of any potential tax liabilities and minimize stress in the long run.
There are some great resources out there to help keep you up to date on new tax laws or changes to current tax laws. Check out Tax Law Guy on Youtube for great pointers on dealing with all different kinds of tax issues.
In conclusion, settling your taxes owed doesn’t have to be a stressful endeavor. By following these tried-and-tested strategies, you can navigate the process with confidence and turn your stress into success. Remember to gather all necessary information, determine your tax liability, explore payment options, communicate with the IRS, seek professional advice, stay organized, and plan for the future.
It’s time to take control of your financial situation and achieve peace of mind. Start implementing these strategies today and set yourself up for a successful tax season! If you need a tax expert to help guide you through this process call us today at 330-331-7611 or submit a free case analysis request.
Disclaimer: This blog post is for informational purposes only and should not be considered as legal, financial, or tax advice. Consult with a qualified professional for personalized assistance.