Usually when there is something wrong financially in your life, you always know it is there. This is especially the case when it comes to filing income tax extensions. People are not the only ones who know this: the IRS also knows this all too well as well which is why they allow tax payers to file late file tax extensions. If you know it is happening to you, do not delay, file your tax extension as soon as possible. It is not so difficult a process any longer. We are fortunate enough that Filing income tax extensions has become much easier in recent times thanks to the method of e-filing. It is a quick and efficient method. If you do not file your income tax extension, then the government will not be happy and you will be punished for it.
Posts tagged ‘IRS’
You may not be aware that the IRS has many payment plans that you can access when you find out that you owe back taxes. A tax professional can help you learn about these payment plans and then assist you in negotiating the solution that’s best for your particular financial situation.
When it comes to payment plans, you’ll first have to decide if you need one. Don’t rule out paying in full. If there’s some way that you could gather the money from accounts that you have in order to pay in full, you should consider it. That way the bill will be paid and the burden lifted off your shoulders. You won’t be dragging out the repayment process and accruing more interest. This might be the way to go even if you fear severely depleting your funds. It’s also possible to borrow the money from family, friends, and other sources in order to pay in full. If that’s an option, consider it seriously.
If you can’t pay in full, you’ll have to think about a payment installment plan. You can work this out with the IRS. They may not seem sympathetic at first, but once it’s known that you’re sincere and intend to pay back the money, you’ll receive fair treatment. Maybe you’ll even be forgiven part or all of the penalties that have been added to the amount if the IRS is happy with the terms you are accepting. You can also pay a good share of the full amount at once and then make installments for the balance.
Continue reading ‘IRS Payment Plans – Tax Professionals Can Help’ »
If you owe money to the IRS and don’t know what an offer in compromise is, you may be missing out on a great opportunity. Generally speaking, an offer in compromise is an agreement that is made between the IRS and the taxpayer. It says that the taxpayer is able to settle his liability for less than the amount that is owed. In short, this means that the taxpayer gets out of debt and the IRS more or less takes a loss. While an offer in compromise sounds like the best type of tax settlement, it is not one that every taxpayer can take full advantage of.
The IRS will not accept an offer in compromise unless the taxpayer can show that they are facing special circumstances. The reason for this is that the IRS loses money with each offer in compromise that they accept. Since they are taking less money to settle the debt they are not collecting the entire amount due. As you can imagine, they only want to do this if there is no other option. But in most cases, there are other options such as having the taxpayer pay in installments.
If you receive the entire settlement amount in one go, then you will not be taxed for it. The IRS believes that this money is supposed to help you get back on your feet and hence, exempts it from taxation. On the other hand, it will most definitely tax the interest that you will earn once you invest that settlement money. That is why, it is necessary to consider the good and the bad points of receiving the entire personal injury settlement amount all at once.
One of the primary points to consider is that as many as ninety percent of people suffering from personal injuries are finished with their settlement money before the end of five years. This happens mostly because of lack of good fiscal guidance, unplanned and bad investments, or lending money to family and friends. Such badly taken decisions only lead to ineffective management of the settlement money.
Next, receiving the settlement money in one go puts you at risk of being taken advantage of. The knowledge that you have received such a large amount of cash will have creditors knocking on your door if you owe them money, con artists thinking of ways to lighten your load, and ex-spouses demanding their share of the booty. Continue reading ‘Advantages and Shortcomings of Structured Settlements’ »