Once you find yourself indebted to the IRS, it can feel like a Herculean effort to dig yourself out and pay off IRS Installments. Even after your installments are paid off, you run the risk of dealing with debt again in the future.
If you’re determined to bring your IRS saga to a permanent close, follow these suggestions:
Prioritize Your Debt
When you’re dealing with multiple forms of debt, it might be tempting to handle your credit cards or personal loans first and continue to pay the minimum amount on your IRS installment. Instead, take a close look at various types of debt to determine which approach will allow you to pay as little interest and as few penalties as possible.
Try for an Offer in Compromise
If you’re dealing with considerable tax debt and you believe that there might a valid doubt as to collectibility, it may be worth your while to seek an offer in compromise (OIC). This solution could help you settle your debt for far less than you actually owe.
While your offer is being considered, you might be allowed to temporarily stop making installments from your previous agreement. You may, however, need to make periodic payments as part of your OIC.
Think of Taxes As a Year-Round Obligation
If you’re like many taxpayers, you file your return in April and forget about the IRS the rest of the year. This approach increases your likelihood of suffering nasty tax surprises that leave you saddled with installments.
Start thinking of taxes throughout the year. Consider the following: Would you benefit from adjusting your withholdings? Or do you need to start making quarterly payments to limit the burden when April arrives? Revisit these concerns periodically to prevent future issues.
As you develop long-term strategies for dealing with the IRS, look to Highland Tax Group for actionable insights. We will help you take the steps needed to make tax debt a thing of the past.