October 4, 2022 The Newspaper Serving LGBT Los Angeles

What are the consequences of tax debt?

Your balance will accumulate interest.

The IRS will charge you interest on top of your tax bill. The interest rate rises as the balance rises. The current rate is 5% every year. When the IRS grants a decrease in interest, the IRS can waive the amount due entirely, or they can remove particular periods from the interest computation.

It is difficult, but not impossible, to obtain IRS interest abatement. If you believe the amount of interest you have been assessed is incorrect or you cannot pay it, don’t hesitate to contact one of our qualified tax professionals.

 

Consulting your situation with an attorney

 

Tax regulations are complex, and an exception or exception may keep you from having to pay taxes on canceled debt. If you are unsure if your forgiven debt is taxable, consult a tax attorney to ensure that something is arranged. In most cases, it pays off for people with tax debt to consult a professional since tax laws can be heavy in documentation, and people often overlook specific qualifications. One disadvantage of filing a dispute with the IRS is that they can use the documentation and information you supplied to resolve the debt repayment process more quickly.

How much do I have to pay?

Most earnings are taxed at your typical tax rate, which for 2021 ranges from 10 percent to 37 percent, dependent on your taxable income. The United States has a progressive tax rate, meaning the tax percentage rises as the taxable base rises.

The IRS will charge penalties in case of late payment.

In addition to interest, the IRS imposes a failure to pay a penalty of 0.5% each month on your unpaid tax total. If the IRS has given you many collection notifications and you have not established payment arrangements, the monthly penalty rate rises to 1%. But there is some good news. Once you get into a periodic payment plan with the IRS, the penalty rate reduces to 0.25% each month, but it might go higher depending on how long you delay your payments.

What happens to my house if I am in debt?

The IRS may foreclose on a residence if it has a federal tax lien. But it is unlikely they’ll do it. The IRS would contemplate foreclosure only if your house has adequate equity to pay off any superior liens, such as a previously recorded mortgage and the IRS obligation. Even yet, the IRS seldom kicks homeowners out of their principal dwelling. The media portrays this activity negatively, and many movies often sketch the wrong image of foreclosure with tax debt. Typically, the IRS will keep the lien on the property until you sell or refinance it.

There are other options.

The IRS has a unique program for individuals who are unable to pay their debt to the IRS. Taxpayers who qualify for the program are willing to pay their tax obligation in installments over a defined period and according to a repayment schedule. In addition, if you are an individual taxpayer ready to return your commitments in a series of payments using a direct payment system, you may be eligible for the IRS Fresh Start Program. This arrangement allows qualifying persons to pay their taxes in smaller, more manageable installments over time, with reduced penalties on tax due. The IRS will examine your capacity to pay based on income, expenses, and equity. If you’re looking to qualify for the program, you should fit these requirements:

– You owe less than $50,000 or more than $50,000; however, you can lower your debts to this level before beginning the program.

 – You may pay off your outstanding debt in less than 60 months.

 – Your tax return has been filed and is up to date.

 – This is the first time you’ve fallen behind on your IRS payments.

 – You will get into a direct payment installment agreement.

 – You will keep the payment arrangement, stay up with tax filings, and will not incur further tax obligations while paying your installments.

 – You will apply for an offer in compromise and have 12 months to pay down the agreed-upon Fresh Start Initiative settlement amount.

If you are unsure whether you qualify, you can contact us for free and get a tax consultation to help with your debt with the IRS.

Tags: in NEWS
Related Posts

Trans Chorus of LA Lifts Voices High in Upcoming Three-Act Show

September 30, 2022

September 30, 2022

The Trans Chorus of Los Angeles is lifting its voice to distill the journey of trans and nonbinary people into...

Historic Gay Sex Bathhouse Building in Downtown LA Rumored to Close Soon

September 30, 2022

September 30, 2022

By Susan Payne A historic sex bathhouse catering to gay, bisexual and men who have sex with men, currently housing...

Anti-LGBTQ Temecula Councilmember Proposes Abortion Ban

September 30, 2022

September 30, 2022

By Susan Payne During a September City Council meeting, a known anti-LGBT councilmember proposed a resolution to attempt to ban...

Liberation Café Hosts Anniversary Celebration, in-Person Dining After Two-Year Pandemic Restrictions

September 22, 2022

September 22, 2022

By Susan Payne Two years after opening, the plastic partitions that separated employees and customers inside of Liberation Coffee House...

Long Beach Police Arrest Possible Suspect in Stabbing Death Outside of a Popular Gay Bar

September 22, 2022

September 22, 2022

By Susan Payne Long Beach Police have arrested a man in connection to a murder outside of Mineshaft gay bar...

Santa Monica Hotel Hosting Monthly Drag Brunch

September 22, 2022

September 22, 2022

Drag Me to Brunch at Lowes Santa Monica Beach Hotel on the third Sunday of every month By Dolores Quintana...

Famous Italian Singer Zucchero to Play Beverly Hills Theatre on Sept. 30

September 21, 2022

September 21, 2022

Zucchero will play at Beverly Hills’ Saban Theatre, one of several American stops on his World Wide Tour  By Susan...

Santa Monica Pride History: Public Panics Over Perceived Homosexuality at Muscle Beach

September 16, 2022

September 16, 2022

By Susan Payne In a scholarly article called “Muscle Beach prompted both fascination and anxiety,” Historian Elsa Devienne studies Santa...

LAUSD Releases Pride Calendar That Helps Educators Support LGBTQ+ Students

September 15, 2022

September 15, 2022

By Susan Payne  The Los Angeles Unified School District is giving schools and teachers a monthly calendar that promotes and...

Respect Los Angeles Hails JoJo Siwa as ‘Gamechanger for LGBTQ Advocacy’

September 15, 2022

September 15, 2022

By Susan Payne Come October, JoJo Siwa will be honored as a gamechanger at the upcoming GLSEN Respect Log Angeles...

West Hollywood Launches Initiative to Prevent Drink Spiking

September 15, 2022

September 15, 2022

By Susan Payne Drink spiking at bars and restaurant is a growing problem. To curb that problem, the city of...

California Candidate for Congress Seeks to Be First Transgender, Nonbinary Member

September 8, 2022

September 8, 2022

By Susan Payne More than 100 LGBTQ+ people have run or are currently running for Congress this year, including 13...

WeHo Gay Bar ‘The Or’ is Opening Soon, Accepting Applications

September 8, 2022

September 8, 2022

Bar owner foresees ‘cool, 1970s, ‘80s trashy cocaine chic’ vibes  By Susan Payne Set for a September opening in the...

Georgia Added to California Travel Ban Post Anti-Trans Youth Sports Law Passage

September 8, 2022

September 8, 2022

By Susan Payne California is restricting state-funded travel to Georgia as a result of its anti-LGBTQ+ legislation recently passed within...

QFilms Long Beach Screens Billy Eichner RomCom ‘Bros’

September 8, 2022

September 8, 2022

In partnership with the Art Theatre, 29th Annual film festival is happening now By Susan Payne Dozens of features and...