Need Tax Assistance? This Straightforward Trick Could Save You a TON of Trouble
(RepublicanDaily.org) – The 2022 tax-filing season began on January 24, and the deadline by which most taxpayers must submit their returns is April 18. So, you still have a number of weeks to get it done, but that date is no doubt too close for comfort as far as many people are concerned.
It’s not all bad news, though. If you’re struggling to pay your taxes for last year, the IRS can offer you a few different types of assistance.
What to Do If You Can’t Pay Now
One option to consider is a short-term payment plan lasting up to 120 days. You can request this from the IRS, without paying a user fee.
If you require a longer-term solution, the IRS also offers installment agreements and monthly payment plans. These options come with a $31 user fee if you use direct debit as your payment method or a $149 fee if you use another means of transfer. If you’re filing as an individual and you plan to return a balance of $25,000 or more via payment plan, you must use direct debit. For businesses, that limit drops to $10,000.
You can apply for a long-term payment plan online if, as an individual filer, you owe less than $50,000 (including any applicable penalties and interest) and you’ve filed all the necessary returns. If you’re looking for a short-term plan, that limit increases to $100,000.
What Is an Offer in Compromise?
An offer in compromise (OIC) is another option to consider. It allows you to clear a debt for less than the total amount you owe. In order to use this option, you must submit a special application to the IRS highlighting your limited financial means, your income and expenses, and the value of your assets.
While this might sound enticing, you need to proceed with caution. The IRS doesn’t approve every OIC application it receives, and there are a number of requirements you must fulfill if you want to succeed in your application. There’s also an application fee.
The most important take-home point is that communication is key. The IRS will be willing to work with you if you’re in a bind, but you have to be willing to work with the agency as well. If you know you’re going to have trouble paying your taxes by April 18, the time to reach out to the IRS is now.
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