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Why Did the IRS Pay $20 Million to Collect $6.7 Million in Tax Debt?


by Staff Writer on December 05, 2018  0 Comment

Why Did the IRS Pay $20 Million to Collect $6.7 Million in Tax Debt?
One of the primary goals of the Internal Revenue Service (IRS) is to collect all of the tax revenue owed to the agency. Because the agency only has so many resources to dedicate to tax collection, it employs private debt collectors to help with this task.   While using private debt collectors has many proponents, the practice may not actually be as cost effective as once imagined, as the IRS recently paid $20 million to collect $6.7 million in back taxes. Here are a few facts about the government's use of private debt collectors and advice that can help you deal with back taxes.  More Money Than It's Worth The IRS has long struggled to collect all the taxes it is ...

Understanding the Collections Process for California State Tax Debt


by Staff Writer on December 05, 2018  0 Comment

Understanding the Collections Process for California State Tax Debt
State taxes in California are administered by the California Franchise Tax Board (FTB). When you file your annual tax return, you may owe state taxes if you live and/or work in California. You could also receive a refund. If you cannot afford to pay the California taxes you owe, the FTB will make attempts to collect the debt. You may also be able to set up a payment plan. Understanding Your Tax Bill When you receive a state tax bill, it means you owe taxes you haven't paid. Some common reasons for receiving a California tax bill include: You sent a payment but didn't include the necessary information for it to be processed. This includes your name, Social Security number, a ...

Tax Repayment Help: Understanding the Available Options


by Staff Writer on December 05, 2018  0 Comment

Tax Repayment Help: Understanding the Available Options
If you're unable to pay your taxes, you aren't alone. More than 10 million Americans faced late payment penalties annually according to data from the IRS reported by Nerd Wallet. Fortunately, tax repayment help is available, ranging from plans that allow you to pay your past-due taxes overtime to tax relief through bankruptcy. Here's what you need to know if you're facing IRS debts you can't afford. File Your Tax Return If you expect to owe the IRS, you might put off filing your tax return, but this strategy is much more costly in the long term. The monthly penalty for unpaid taxes is 0.5 percent of your balance, compared to 5 percent of your balance monthly if you fail ...

IRS Personal Taxes


by Staff Writer on December 05, 2018  0 Comment

IRS Personal Taxes
Owing taxes to the IRS is a serious matter that must be resolved as soon as possible to avoid unpleasant consequences and unnecessary stress. Once you've realized that you owe a hefty tax bill, you must be proactive about the situation, especially if you find yourself unable to pay in full right away. Whether you are short on money due to an emergency or some significant life event, you need to know what to do next and what mistakes to avoid. Costly Mistakes — What Not to Do Before we go into details about what to do if you owe taxes, let's look at some common mistakes taxpayers make. Not Filing Your Return Many taxpayers tend not to file a ...

Living Overseas? What Expats Need To Know About IRS Debt


by Staff Writer on December 02, 2018  0 Comment

Living Overseas? What Expats Need To Know About IRS Debt
According to data reported in the Washington Post, about 8.7 million Americans currently live overseas. If you're already among their numbers or you're considering becoming an expatriate, you will have tax considerations when you move to another country. This is especially true if you plan to work while you're there. If you have debt with the IRS, your situation becomes even more complex. Expats and future expats who have tax debt should heed this information to avoid steep fees and penalties.   Rules for International Income You must file an income tax return if you earned money during the tax year through wages, dividends, interest, rental income, and/or all other U.S. and non-U.S. sources. Self-employed individuals must file when they earn more ...

How Veteran Status Affects Your Tax Debt


by Staff Writer on December 02, 2018  0 Comment

How Veteran Status Affects Your Tax Debt
If you are a veteran and you owe taxes you cannot afford to pay, you may be eligible for IRS relief programs. Veterans also receive special consideration in certain other tax matters. The IRS defines a veteran as an individual who has served at least 24 consecutive months in active duty and has not received a dishonorable discharge. This includes full-time members of the Army, Navy, Marines, Air Force, and Coast Guard as well as commissioned officers of certain federal agencies. Spouses, children, and parents of deceased and disabled veterans also qualify.  Tax-Exempt Disability Benefits Your taxable gross income does not include your VA disability benefits. This includes:  Pension and disability compensation payments, including those paid to your family.  Grants ...

Handling Tax Debt in Your Divorce


by Staff Writer on December 02, 2018  0 Comment

Handling Tax Debt in Your Divorce
The end of a marriage can be a sensitive situation to handle. When a couple separates, they have decisions that have to be made, such as custody of children. The property gathered over the time of the marriage has to be divided between the spouses. All of the debt that a couple has together is also required to be divided between them. This debt includes any tax debt that the couple has together.   When going through a divorce, especially a contested divorce, the court handling the divorce proceedings will determine how everything in the marriage will be handled.  Divorce Court and Tax Debt Specific laws determine how creditors can go after money owed to them. The IRS collects tax debt, ...

Find Our Why 360,000+ Americans with Tax Debt May Be Denied Passports


by Staff Writer on December 02, 2018  0 Comment

Find Our Why 360,000+ Americans with Tax Debt May Be Denied Passports
Almost everyone knows that failing to pay their taxes can result in serious consequences, but few would imagine that tax debt can restrict their ability to travel. Well, many people are now facing this reality, as more than 360,000 Americans with tax debt may be denied passports.   The State Department has the ability to revoke the passports of citizens with a certain amount of tax debt, which means you could find yourself without the ability to travel to other countries if you fail to pay your taxes. Learn more about losing your passport because of tax debt and find out how you can rectify this serious situation.  The Fixing America's Surface Transportation Act In 2015, the Fixing America's Surface Transportation (FAST) ...

What is the Statute of Limitations on Tax Debt?


by Staff Writer on December 02, 2018  0 Comment

What is the Statute of Limitations on Tax Debt?
If you're living under the shadow of unpaid taxes, it's likely that you have a variety of questions, including how long the Internal Revenue Service (IRS) has to come after your back taxes. Fortunately, your tax debt is subject to a statute of limitations (SOL). After the statute of limitations has expired, there are only a few circumstances in which the IRS can come after you for unpaid taxes. Here are a few things about the statute of limitations on tax debt that you should know if you have unpaid taxes hanging over your head. What is a Statute of Limitations? If you're not familiar with the term “statute of limitations,” the best way to think of it is as ...

Tax Tips for Nurses


by Staff Writer on November 29, 2018  0 Comment

Tax Tips for Nurses
Nursing is an attractive career for those who want to serve others while enjoying challenging work, competitive pay, and the opportunity for professional growth. If you're a nurse, keep in mind these tax tips to maximize your potential refund. Nurse-Specific Tax Deductions Itemizing your tax deductions can potentially reduce your tax burden compared to taking the standard deduction, depending on the total amount of your deductions. Nurses might be unaware of certain professional deductions they can claim on their tax returns, including: Medical supplies and tools beyond what your employer provides. For example, perhaps you purchased your own stethoscope; the cost is tax-deductible. Keep in mind that equipment that will be used for longer than a year must be deducted ...

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