Avoiding Tax Penalties this Year There are many common problems that are associated with taxes. When a tax payer does not have enough money to pay his or her taxes, it is important that a solution is made quickly to ensure that penalties are not adding up throughout the process. When a tax payer does not have the money that they owe an installment plan will need to be worked out. An installment agreement is an agreement between a tax payer and the Internal Revenue Service that allows the tax payer to pay his or her taxes in installments. Paying taxes in installments allows many tax payers the opportunity to pay the taxes that they need to pay without running into penalties or more fees. The right for an installment agreement between a tax payer and the government belongs to those that cannot pay the tax bill. It is important that the tax payer can prove that he or she does not have the cash or the liquid assets to be able to pay for the taxes that are owed. The tax payer must file to have an agreement made and often times the Internal Revenue Service will not even suggest this option.
Knowing the Forms When filing for an Installment Agreement tax payers have to fill out the Form 9465. This form is easy to fill out and it is important that this form is filed early and all of the form is filled out properly and filled out accurately. As a tax payer fills out the form he or she will need to include the amount of money they can afford to pay each month. This figure is important and it needs to be carefully calculated to ensure that it is accurate before it is sent to the Internal Revenue Service. The tax payer should have a very accurate understanding of his or her income, monthly expenses, assets and liabilities. The IRS will take this information and determine an amount that is acceptable for a monthly payment from the tax payer.
After Making the Deal Once there is an installment agreement formally in place, the Internal Revenue Service will not have the right to enforce collection, modify or terminate the agreement. As long as the tax payer follows the legally binding contract he or she will be safe from collection. When a collection is enforced on a tax payer, financial havoc may be the result. All of the tax payers that think they are not going to be able to pay the full amount of their taxes should understand the importance of looking into an installment plan.
Tax laws and lingo can be very hard to navigate alone. While learning how to navigate the tax system, it is important that tax payers seek the help of professionals to ensure that they have the knowledge that they need to be able to successfully file their taxes without penalties. Learning the system may be of benefit even if a Los Angeles tax lawyer is hired. All tax payers can go through tax season without needing to get help due to tax debt help. Photo Credit: Bob Jagendorf, Alan Cleaver