Here is All You Should Know about Federal Tax Relief

The topic of federal tax relief is a long-discussed one that might seem like a big black hole of uncertainty for some. Unfortunately, a lot of people find themselves in dire need of tax relief because they cannot pay their taxes, and the IRS, as we all know, doesn’t really forget and forgive.

However, the good news is that various federal tax relief programs can certainly help you solve your tax-related issues and not carry this burden alone. Nobody likes falling behind when it comes to paying their taxes which is why the following federal tax relief programs could end up saving your life, metaphorically speaking. This is what you should know about them!

How Does Federal Tax Relief Work?

Federal tax relief comes in the form of well-established programs that are meant to help people pay their taxes through various methods like organized payment plans, a reduction for the amount owed, or even delays in payment. Here are the most important programs that you may want to check out if you’re in trouble with the IRS.

Payment plans from the IRS

In case more time it’s the only thing that you need in order to pay your bills, the IRS can give that to you in the form of a payment plan. What this federal tax relief program means is that you will be given the chance to pay all of your taxes plus any fees and interest over a certain period. These plans can be either short- (which is 120 days) or long-term (over 120 days).

For the short-term payment plan, you need to owe a maximum of $100,000 to be eligible while for the long-term one you need to owe a maximum of $50,000. For the short-term plan, you can apply online, via phone, e-mail, or in person for free while for the long-term one you will need to pay a $31 fee if you want to apply online and a $107 one for applying in any other way.

It’s worth noting that in case you owe over $25,000 to the IRS, you will have to pay through withdrawals from your bank account which will be automatically made. Also, remember that through this federal tax relief program, the IRS allows you more time to pay your taxes. They do not erase your back taxes or diminish it!

Offer in compromise

Through this particular federal tax relief program, you will be allowed to your back taxes for less than what you would normally owe. This is a solution if paying all of your taxes will get you and your family into what’s considered financial hardship. The biggest problem with this program is that the IRS only accepts less than half of all applications.

You should consult the IRS Form 656-B for all the necessary info on this program. In short, there are a lot of requirements that you should meet and they have to do with your income, ability to pay, and expenses. For example, you should pay a $205 fee only to apply for this program, unless you are in the low-income category. According to multiple experts, this is a last resort solution out of all the federal tax relief programs that are available.

Currently non collectible

The IRS can also mark your account as “Currently Non Collectible” in case you are unable to pay your taxes. Upon requesting this, you will need to fill out the Collection Information Statement which will prove that you’re saying the truth. It will ask you to provide info on your income, inability to pay, and expenses, among other things.

It’s extremely important to know that this federal tax relief program is not a permanent thing. The IRS will analyze your situation continuously and determine whether or not this status should be active. Also, your back taxes will not simply disappear and the IRS can still come after you. So, make sure that you are balancing all of your options correctly and making the right decision for you when it comes to federal tax relief programs.

Additional Features to Consider

There are other types of tax deductions and credits that the government offers in special situations. For example, the EITC credit (Earned Income Tax Credit) can help diminish the amount of owed taxes if you meet certain requirements.

There are some federal tax relief programs for education or the CTC (Child Tax Credit) that can reduce the amount you owe based on how many children you need to care for. You can also benefit from tax reductions if you regularly make donations to charity or if you have recently been in a situation that was deemed “disastrous”. This includes recent natural disasters too like hurricanes, storms, wildfires, or earthquakes.

How We Can Help You Decide

An additional solution to consider if you cannot pay your taxes is to enlist the help of a private tax relief company. This is where we come in! Our website has an impressive collection of the best tax relief companies on the market right now. Our reviews are complex and up-to-date so you can have the possibility of making an educated choice if you need help with paying your taxes.

The companies in our portfolio also benefit from a rating system based on a strict selection of features that will help you decide on the best company for you. Besides that, you will find a plethora of helpful articles on the website along with all the information that you may need when it comes to the IRS and filing and paying taxes.

Bottom Line

All in all, it’s crystal clear that the topic of federal tax relief is still a wildly mysterious one. This is why people should be educated on it with simple information that could end up helping them live a better life. The aforementioned federal tax relief programs are not the only ones available and you should check your state’s website to see whether or not there might be something of interest there too. Also, these programs will not apply to everyone who cannot pay their taxes to the IRS. This is why it’s so important to analyze your options and make the best decision for your particular situation.