Monday, November 29

How Can I Get Rid of My Back Taxes?

It’s always a good idea to start taking your finances more seriously. Owing back taxes can be a serious problem if you let them pile up, though many people feel they have no choice due to financial strain. However, many people don’t know what to do to deal with their tax debt. Some don’t even know how to find out what they owe. Though the process can be confusing, there are few things more necessary than taking meaningful steps to improve your financial situation. If you owe back taxes to the IRS, read on to learn more about how you can get rid of them.

How can you get rid of your back taxes?

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Anyone trying to clear their back taxes should start by addressing other sources of financial hardship, which can also free up the money you need to start paying down your tax debt. Citizens Debt Relief is a great option for anyone struggling with a large amount of credit card debt. Debt from credit cards can be especially troublesome due to the high-interest rates that most cards have. Debt relief professionals can help you come up with a plan that fits your lifestyle and lets you pay down your debt over time with a single monthly payment.

The first thing you need to do to deal specifically with your back taxes is finding out exactly how much you owe the IRS. The IRS website can provide this information for you free of charge. If you can’t afford to pay off what you owe right away, you have several options. Anyone who is unable to make any payments due to their financial situation can request that their tax debt be categorized as “currently not collectible.”

Another possibility is to repay your back taxes through a payment plan, which can be either short- or long-term. You may also be able to settle for less than you owe through an offer in compromise. This can be difficult, as the IRS rejects the majority of applications for offers in compromise. You’ll need to demonstrate significant financial hardship that prevents you from being able to make payments on the current balance.

What products can help you organize your finances?

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One of the best things you can do for yourself is getting your records in order. Keeping your important documents organized, especially those related to your finances, is essential if you want to get out of debt. Investing in custom pocket folders is a good idea. You can have them designed and labeled so that you know exactly what is in each folder. A high-quality filing cabinet, even if it’s a smaller one, is also a smart buy.

You should also start getting serious about making a budget. There are even a number of popular budgeting apps that you can use right from your phone. If you’re new to budgeting or struggling to make a realistic plan to cover your living expenses, consider talking to a financial planner or a fiscally savvy friend for help.

You have plenty of options when it comes to deciding how to approach your tax debt, but the right choice depends entirely on what works for you as an individual. Anyone who can’t pay off their balance immediately can look into other options like payment plans or offers in compromise. As a last resort, some tax debt can be discharged via certain types of bankruptcy, but this still may not relieve all of your debt and declaring bankruptcy can affect you financially for the rest of your life. Taking additional measures, like reducing credit card debt, is just as important. You don’t just want to get out of debt, you want to stay out of debt.