There are often two distinct groups as tax season approaches. Some anticipate a refund and start planning large purchases, and others know they will owe more than they can afford to pay.
As tax season gets closer, you may start to worry about what you will owe and what will happen if you cannot pay or cannot afford a payment plan with your current lifestyle. These unknowns can create stress for you and your family.
Here’s what you should know about tax debt and how it could impact your wages.
Increases in wage garnishment
The last couple of years have been challenging for many Americans. It can be difficult to imagine paying your current taxes with family budgets remaining tight. Still, the IRS is ramping up its efforts to collect debts.
When your taxes become past due, the IRS will send several notices to remind you to pay or make other arrangements, like a payment plan. If you do not make an arrangement, the IRS may garnish your wages to collect your tax debt.
Contractors also at risk
It’s not just full-time employees who can be targeted; the IRS can garnish the wages of contractors as well. In this case, the IRS will send levies to your contracting sources, which obligates them to give your anticipated payments on invoices directly to the government instead. If they do not, they will be liable for whatever they pay you. This scenario can ruin your reputation among your business circle and specifically potential as well as actual contracting sources, so it’s important to get experienced counsel. A tax attorney can identify alternative resolutions to reduce the levy amount, give you some breathing room and allow you to save face professionally.
Getting the right support
Owing a significant debt to the IRS can feel overwhelming. An experienced tax attorney can give you a thorough analysis of your situation and help you develop a plan for resolving your debt. The IRS needs to collect, and you want to make sure that when working with a tax professional, this person is responsive so you are allowed the time and flexibility needed to resolve your balances due.
When the IRS thinks you are not being responsive fast enough, it will institute wage garnishment is for people who have no plan in place and have a past-due tax debt. Working with an attorney can help you find an agreement with the IRS, so they do not garnish your wages.
This can be a challenging situation, and you should not handle it on your own. An experienced professional can help you find a solution for your tax debt.