Being a writer is great. I get to work at whatever location I choose (my home, the local coffee shop, the beach), wear whatever clothes I want (usually its yoga pants and a tank top), be my own boss (no more pushy people standing over me grading my every move), choose my own hours (I get my energy at night so I write in the afternoons and evenings), and pick my projects (I don’t have to work on what my boss tells me too. I get to choose).
It’s really my dream job and I am so thankful to Mark Patricks for giving me the opportunity to speak with you once a week about saving money. I’ve learned a lot and I hope you have too. Sometimes I can’t believe I get paid to research ways to save money that benefits my own family!
A Shocking yet Surprising Video
I have something a little unusual to share with you today.
It involves a story of a former “dancer” who was able to turn her life around in a very short period of time. She did this using a rather unconventional method. One she personally admits was a little embarrassing to share.
**End Sponsored Content**
But as with every job there are negatives. This time of year every home based business owner knows the negative I’m talking about. This is the middle of March and we are but 5 shorts weeks away from the tax deadline.
Taxes aren’t as bad if you’ve been paying a portion of the bill with every paycheck. Business owners like me tend to pay their tax bills in quarterly installments. Though even when I do this I still find I wind up owing a little more at the end of the year. Probably from picking up extra projects and making more money than I planned.
Thankfully I set aside 30% of each paycheck to pay my taxes. I will be able to give Uncle Sam his cut of my money but I know that there are others out there that are struggling to pay household expenses, let alone a hefty tax bill during the next month. So I’ve looked into ways one can pay and settle their tax debt with the IRS so they can limit their stress and focus on making money.
There are only three ways one can settle their tax debt for less than what they owe the government. And each of them is very difficult to pull off. The IRS are a determined bunch who will go to great lengths including garnishing your wages and dipping into your bank account without your consent to get any money they feel is theirs.
When you hear TV commercials offering to settle your IRS tax debt for pennies on the dollar most likely they are referring to the Offer-in-Compromise debt relief strategy. The IRS only does this when they believe they will not be able to recover the full amount owed. They settle on an amount that the tax payer can reasonably afford to pay off and the remaining balance is wiped clean.
The IRS has strict qualifications for accepting less money than what they are owed. A taxpayer must be in extreme financial distress. Before they will accept a lesser amount the IRS will sell any assets you have including your house, car and furniture. Only when your outstanding tax liability outweighs your collection potential will this offer be accepted. If a company says they can do this for you most likely they are not disclosing to you all of your options. This strategy is a long shot at best.
If you can prove to the IRS that you do not have the ability to pay off your tax debt then you can get them to declare you as “currently not collectible.” This stops all collection activities against you, but does not necessarily wipe out your debt. The IRS has a 10 year statute of limitations to collect on the tax debt. If at any time during those years you are able to pay off even a portion of the debt, the IRS will come after you.
An easier and much more likely to happen way to pay off your tax debt is to work out a partial payment installation agreement with the IRS. This debt reduction strategy requires the taxpayer make regular monthly payments to the IRS, but the total of the payments do not pay off the entire debt. This is a great option for people who received a hefty tax bill and can’t afford to pay it off all at once.
Some tax professionals will try to convince you that bankruptcy is a tax debt relief option. I am not of this opinion. Bankruptcies do a number on your credit and may even hinder your ability at future employment. More and more employers are using credit scores when deciding between candidates.
Naturally the IRS does not make it easy to go any of these routes. There is a tremendous amount of paperwork to be filed and you must be able to show the IRS that it is in their best interest to settle for less than the amount you owe them.
If you owe the IRS more money that you can afford to pay all at once your best bet is to set up an installation agreement with them. This will allow you to break down your total tax bill into more affordable monthly payments. There are different types of monthly payment agreements; each comes with its own pluses and minuses. If you owe less than $10,000, and can pay off your debt in less than 36 months then the IRS is virtually required to agree to a monthly payment arrangement with you. Look into the requirements and advantages of each installation plan on the IRS website.
To get the IRS to agree to any of these debt relief options it will most likely require the help of a seasoned tax professional. When choosing a professional look at their credentials. Only certified public accountants, enrolled agents and tax attorneys are allowed to present cases to the IRS. CPA’s and tax attorneys can only practice in the state they are licensed, but enrolled agents may practice in any state.
Please be wary of any company that promises you they can settle your debt for pennies on the dollar. Undoubtedly you’ve seen one or two commercials where companies make these promises. Not all of these offers are scams but a lot of them are. It is nearly impossible to convince the IRS to take less than what you owe. Any company or individual who promises they can reduce your tax debt is probably blowing smoke up your ass and attempting to bilk you out of more of your hard earned cash.
Cash is King Right?
Do you need cash now, quickly, easily and ethically? Sure you do, that’s what we’ve all been looking for. However, it seems like we run into the same problems…There is either not enough time in the day, lack of know-how or simply do not have any products to sell.
Am I right?
That’s why I’m sending you this urgent bulletin…
**End Sponsored Content**
Until next time…
Keeping Money in Your Pocket,