When you’re dealing with tax debt problems, it can feel like your whole world is falling apart. It’s stressful and challenging, and the longer you leave it unchecked, the more problems it will cause in the future. However, by being proactive and mindful of your problems, and as long as you’re taking steps in the right direction and making good decisions, you can get it sorted out as quickly as possible.
But what correct decisions should you be taking? Today, we’re going to share with you three key ways you handle your tax debt and try to make the whole process and experience as pain and as hassle-free as possible.
1. Don’t Avoid Your Problems
With financial problems, it’s easy to fall into the habit of ignoring them and hoping they’ll go away, when in fact, you need to be constantly aware of them and proactive in sorting them out. If you don’t acknowledge their existence, you won’t be able to free yourself from the stress, and may even get into trouble if you miss deadlines.
Instead of ignoring your problems, face them head-on and aim to get them sorted out. The IRS is not going to ignore that you have problems, so do what you can to get them sorted out.
2. Sort the Issues Out Yourself or with a Professional
If you owe less than $10,000 in tax debt, the chances are you can save money and handle it yourself. You won’t need to hire professional help from an accountant or debt specialist. This is because you can file the IRS Form 9465, which can set you up with an installment plan. The form can be filed online and will allow you to pay off everything, including your debt balance and penalties, over a 36-month period.
Alternatively, if you owe over $10,000, you’re probably going to need professional help from a financial service to help figure out what your individual options are and how you’re going to get the problem sorted. From accountants to a wage garnishment lawyer, find the service that’s going to benefit you and sort out the problems you’re facing as an individual.
3. Manage Your Finances Strictly
The longer you’re in debt, the more problems you’ll face and the more penalties you’ll incur, so make sure you’re handling your finances as strictly as possible to get out of debt as quickly as possible. This may mean cutting back on costs and expenditures, and making sure you see where every cent is going.
Track where your money goes and see if you can make savings anywhere to pay towards your debt, even if it’s a little amount. Over time, you’ll be able to pay off your debts quicker and reach a state of financial freedom.
There are plenty of strategies out there you can use to manage your tax debt, but it all comes down to you as an individual or business. Every financial situation is different and will require a different approach, so be mindful and try to figure out, as best you can, what works best for you.