How can you fix your income tax debt problems

Are you unable to pay your tax for a long time and is feared about the long arm of IRS that can create pressure on you? If yes, then you can take help of any of the following methods that will help you pay your income tax debts and have control over your money.  

Income tax debt pay off methods

Read on to know the 4 types of agreement that you can consider to repay your income tax debt.

1.  Settle your debt amount:

If you’re unable to pay off your debt, then you can enroll yourself under certain programs that will help you settle your outstanding balance less than what you owe. This can be done by distributing the debt into short term payments or long term payments. Before you apply for it, you should be aware of the fact that about 15% of the applicants will be eligible for the offer in compromise. Here, a tax professional will negotiate with an IRS to reduce your tax amount. If your application is accepted, then you have to pay the IRS less than your existing income tax debts.

2.  Choose a long term payment plan:

If you fall under the category of people who failed to qualify for settling their income tax debts but still want to take care of their tax debts, then you can opt for a long term payment plan. Here, you have to make monthly payments to the IRS to repay your income tax debts. You can choose any of the five IRS plans to repay your debt. 

• Streamlined installment agreement:

When you’ll apply for a streamline installment agreement, you’re not required to produce your financial documents in front of the IRS. However, if you owe not more than $25000 and agree to repay your income tax debt amount within 5 years, then you will be eligible for this program. You have to pay the IRS a monthly payment not less than your outstanding balance divided by 50.

• Guaranteed installment agreement:

Guaranteed installment agreement is most commonly used by the taxpayers. This will be perhaps the best installment agreement that you can opt, if you’re current on your payments set forth by the IRS. To qualify for this agreement, you cannot owe more than $10000 as income tax debts and have to pay the amount within three years.

However, dealing with the IRS can be frustrating and confusing for you. Thus it is advisable that you should appoint a tax professional who will deal with all your queries and help you pay your income tax debts within the specified time period required by the agreement.