Title: A Tax payment plan: All FAQs Answered Content: Tax payment plan or installment agreement, both refers to kind of an agreement between the taxpayer and the IRS. In most of the cases, such agreements are negotiated to assist a taxpayer with an increasing tax debt. In the passages, ahead you can have access to some of the most frequently asked questions in this regard, along with their best possible answers. Please, note that the information provided in this article revolves around the federal taxes and IRS only. What are the federal taxes? These taxes, directly collected by the State to supplement its operational requirements. Any individual, with certain per annum income, is bound by law to pay these taxes. The most common kind of federal tax in context of a business is payroll tax, whereas income tax is the most common one for salaried individuals What does it mean, filing a return? According to the tax law, it’s necessary for every individual and business to declare every bit of its financial progress at the end of each fiscal year. This information is provided through a comprehensive format, and its submission is known as the filing of a return. Later, on basis of that information the IRS checks whether the submitter of that return has paid his tax liability fully or not When should I look for installments? A tax payment plan or installment becomes best suited when you tax debt erupts and starts building on. This is one of the most feasible options that can be chosen. However, the individual should try to clear his debt as early as possible. Opting for a tax payment plan should have be assumed as the last option.
What is the advantage of a payment plan? The only advantage of going with such a payment agreement is that possibility of paying back your debt over a long period, in equally or otherwise distributed installments. In this way, an individual comes in a safer place somehow. What are the disadvantages? There are certain obvious disadvantages that come with this kind of settlement. The major disadvantage is that penalty that one will pay each month until and unless he clears his debt. These penalties remain growing in a way that, sometimes the amount paid becomes many times of the due amount. What is the criterion? As far as the eligibility criterion is concerned, it seems quite simple. However, meeting this criterion does not mean that the applicant is ready to go through now. There are several other procedural loops and regulations, and each applicant will face them. As a reference, you can keep in mind that, for an individual taxpayer the total debt should not exceed $50,000 and for a business taxpayer this limit is set at $25,000. Please note that these limits are inclusive of all the penalties too. Should I keep filing my returns? This is something very important. In fact, anyone without a hundred percent compliance in this regard can fall short of going to a tax payment plan. Therefore, whether you are paying it in full, or you are not paying your tax at all you still have to file your returns Should I seek Professional Support? Experts suggest in favor of seeking a professional's support. This is something highly technical in nature and only a person with a complete grasp of law can understand it well. The process, on the other hand, is a very complicated one. Therefore, you should seek a competent person with having, A credible place in the market Enough credentials to represent you unlimitedly Expertise across the tax laws Relevant experience, necessary to get a tax payment plan materialized
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