Common Tax Relief Programs the IRS Offers
January 5, 2022
Be in the Know with your Taxes
The old saying that nothing is certain in life except death and taxes has never been truer, or more frightening. In the current environment, fear of the IRS is creeping in, and nothing will get your heart racing quite as fast as opening the mailbox and finding a letter from the tax agency.
When the IRS comes calling, you might think that there is nothing you can do. You may worry that you will have to liquidate your assets, sell your car or even put your home on the market to afford what the IRS says you owe.
The good news is that you may not have to pay that total amount, and before you write that big check you should check out the alternatives first.
The IRS actually understands taxpayers fall behind on their taxes, and they have programs in place that can reduce the amount you owe or at least make paying the tab a little easier.
Note: As a tax resolution firm, we always recommend that you reach out to a professional who knows how to aggressively negotiate with the IRS on your behalf. If you owe back taxes, our firm can help negotiate with the IRS and potentially settle your tax debt. Call us today. Our tax resolution specialists can navigate the IRS maze so that you have nothing to worry about. Contact us for a complementary consultation.
With that said, here are some of the most common tax relief programs the IRS has to offer - and how you can access them.
#1 Payment Plans
Otherwise known as installment agreements, one of the most common ways taxpayers approach the repayment of their back taxes is by setting up a payment plan. This type of program is a popular one, and for good reason - it can greatly reduce the stress you feel as you deal with an unexpected tax bill.
There are pros and cons to this approach, and it is important to explore your other options very carefully. With a payment plan you will need to pay the entire amount you owe, but you can stretch the repayment out over months or even years. Keep in mind, however, that the IRS will continue to charge interest on the remaining balance, so this option will require you to pay more than the amount you owe.
Offer in Compromise
Another program the IRS offers is known as the offer in compromise, or OIC. This option allows eligible taxpayers to settle their tax debts for less than the IRS says they owe, and that means you could save money if you qualify for this program.
The offer in compromise is not right for everyone, and it is important to work with a tax relief expert or tax resolution specialist if you are exploring this kind of compromise. If you have significant assets, the IRS may not be willing to settle, but if you are strapped for cash the offer in compromise arrangement could be the way out of the trouble you find yourself in.
IRS Hardship Program - Currently Non-Collectable
The IRS hardship program is another option for taxpayers who are financially unable to pay what they owe to the tax agency. If you are truly strapped for cash and worrying about your tax debt, you should definitely check out the hardship program, but you should not try to work with the IRS on your own.
The hardship program has some very specific requirements, and if you make a mistake when applying you could find yourself locked out of the process. By working with a tax resolution specialist you can increase your odds of success and possibly save yourself a lot of money in the process.
What is the best option?
As you can see, the IRS does offer a number of programs that can reduce the amount you owe - or even forgive your tax debt altogether. If you are eligible for one of these tax relief programs, you could find yourself breathing a lot easier, but the IRS is not likely to give you the information if they do not have to.
As a taxing authority and agency, the IRS has an interest in keeping these relief and resolution programs under wrap. Their goal, after all, is to collect as much money as possible and telling taxpayers that they can pay less is simply not in their interest.
For all of those reasons and more, it is important to work with a tax resolution professional whenever you are dealing with an IRS problem. Whether the debt is the result of years of unfiled taxes, a discrepancy in the amount reported and what the IRS says you owe or anything else, specific expertise can make a huge difference - and save you a lot of money in the process.
Knowing about the tax relief and favorable resolution options the IRS offers is the first start, and that education can be a huge point in your favor. Now that you know what types of programs are available, it is time to take the next step, so pick up the phone and call us, your tax resolution specialist, today.
It seems like natural disasters such as hurricanes, floods, earthquakes, wild fires, and tornados are happening all the time and just about everywhere. Climate change also seems to be making these disasters more deadly and more destructive. Many people do step up to help survivors with needed financial donations. The only thing worse than the disasters themselves are the scammers that exploit these situations for financial gain at the expense of hard working and well-i ntentioned survivors and donors. Like yourself! Scams can take the form of fake charities and impostors posing as legitimate organizations or government agencies. Common scams typically entail vague appeals for donations without details, fake websites with names like real charities and caller ID tricks to appear legitimate. Several warnings signs of these scammers are: 1) pressure to give immediately, often preying on your emotions and not logic 2) a thank-you for a previous donation you don’t recall making 3) a request for payment by cash, gift card or wire transfer. The last are scammers’ favored payment methods because the money is easy to access, difficult to trace and almost impossible to cancel. A legitimate charity will welcome your donation whenever you choose to make it and by whatever means you choose. A great way to verify their legitimacy is to use the IRS Tax Exempt Organization Search tool at https://apps.irs.gov/app/eos/. Additionally, clients should always ask for a receipt and then check their bank or credit card statements to ensure the donation amount is accurate. If you think you were a victim of a suspected scam, you can and should report them to the Federal Trade Commission at https://reportfraud.ftc.gov/. How Advantage Tax Relief Can Assist You At Advantage Tax Relief, based in Itasca, IL, we have over a decade of experience helping individuals and businesses resolve tax issues. Our team specializes in offering personalized tax relief and tax resolution solutions tailored to your unique needs. We will work with you to assess your situation and explore your options, whether it’s an Offer in Compromise, installment agreements, or other strategies. Our experience allows us to identify the best path forward to ease your tax burden and guide you toward financial freedom. If you're facing tax debt, don't wait. Advantage Tax Relief is here to assist you with effective, professional help. Call Advantage Tax Relief today at 630-773-3200 to schedule a consultation and take the first step toward resolving your tax issues.
Under the new One Big Beautiful Bill Act (OB3), qualified tips are any cash tip received by an individual with a valid Social Security number and in an occupation that 'customarily and regularly' received tips on or before Dec. 31, 2024. They include tips that are paid in cash or charged. The Treasury Department has not yet released the “official” list of occupations that qualify for the No Tax on Tips Regulations. It is expected, though, that the job titles will include but not be limited to those listed below: 1) Food & Beverage : Bartenders, Wait Staff, Servers, Chefs, and Cooks 2) Entertainment: Gambling Dealers, Change Persons, Booth Cashiers, Dancers, Musicians, Singers, Entertainers, and Other Performers 3) Personal Services: Personal Care Workers, Private Event Planners, Photographers, Videographers, Event Officiants, Pet Caretakers, Tutors, Nannies, and Babysitters. 4) Personal Appearance & Wellness: Skincare Specialists, Massage T herapists, Barbers, Hairdressers, Cosmetologists, Manicurists, Exercise Trainers, and Group Fitness Instructors. 5) Recreation : Golf Caddies, and Tour & Travel Guides. 6) Transportation : Ride Share, Taxi, and Food Delivery, Drivers, Porters, and Sky Caps. The final list is expected to be issued in October, 2025. Some implications of the No Tax on Tips Regulations. First , the deduction is for qualified tips of up to $25,000 per year regardless of how many employers you have during the year. The tax savings will be in the form of a tax deduction when you file your Federal tax return the following year. Second , qualified tips must be reported to the individual on one of three forms to be eligible for the deduction; a) Form W-2; b) Form 1099-NEC, Nonemployee Compensation; or c) Form 1099-K, Payment Card and Third-Party Network Transactions. Third , it only applies to Federal income taxes. It does not include State, Local, Social Security or Medicare taxes. Finally, the maximum annual deduction of $25,000 for single filers and $25,000 each for joint or married filing separately filers phases out by $100 for each $1,000 for taxpayers with modified adjusted gross income over $150,000 (or $300,000 for joint filers). How Advantage Tax Relief Can Assist You At Advantage Tax Relief, based in Itasca, IL, we have over a decade of experience helping individuals and businesses resolve tax issues. Our team specializes in offering personalized tax relief and tax resolution solutions tailored to your unique needs. We will work with you to assess your situation and explore your options, whether it’s an Offer in Compromise, installment agreements, or other strategies. Our experience allows us to identify the best path forward to ease your tax burden and guide you toward financial freedom. If you're facing tax debt, don't wait. Advantage Tax Relief is here to assist you with effective, professional help. Call Advantage Tax Relief today at 630-773-3200 to schedule a consultation and take the first step toward resolving your tax issues.
First, working overtime does not mean you are getting an automatic increase in your take-home pay because it is not going to be taxed. That is not what is going to happen. The tax savings will be in the form of a tax deduction when you file your Federal tax return the following year. There will be no immediate impact. Second, it only applies for Federal income taxes. It does not include State, Social Security or Medicare taxes. Third, it also only applies to the overtime premium and within certain deduction and wage limits. You can only deduct the pay that exceeds your regular rate of pay. The 'half' portion of 'time-and-a-half' compensation. For example, say you make $20 per hour and work 5 hours of overtime that week at time-and-a-half. The deduction would the Federal tax on $50 of premium pay. ($20 divided by 2 times 5 hours) Finally, the maximum annual deduction is $12,500 for single filers and $25,000 for joint filers. The deduction phases out for taxpayers with modified adjusted gross income over $150,000 (or $300,000 for joint filers).
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