If you haven’t already filed your tax return, it’s urgent that you do. The modified tax deadline was pushed back by a month, but it expires on Monday the 17th. When you owe back taxes, you might not even get any money back from the IRS. However, there are still ways to work around this problem. Let’s have a second look at how the tax relief process is supposed to work.
Taking Out a Personal Loan
Insufficient funding to pay off your tax debt can be a crushing burden. After all, paying for rent and utilities can be difficult enough. That is to say nothing about the phone bill and getting gas and groceries. In some cases, taking out a personal loan may be your only option. This solution is nothing to be ashamed of; on the contrary, it’s another pathway to success. Before you do this, you’ll need to do some relevant research. Loan rates, terms, and credit reports are all factors that can affect whether or not you get approved.
Consulting with Tax Relief Firms
Personal loans aren’t guaranteed. So, given the possibility of your application being denied, you could work with specialized tax relief companies instead. These firms will haggle with the IRS for you, but you’ll have to pay them for this service. Reputable tax relief companies will do their best to strike an agreement with the IRS that is beneficial to all parties involved. Some of the outcomes they can arrange for you include the offer in compromise, repayment installment plans, and penalty/interest abatement.
Protecting Yourself Against Tax Identity Theft
Identity theft can happen to anyone at any time. Think of the times when you’ve gone to get money from the ATM just to find out that your account is either zero or overdrawn. That situation is anxiety-inducing, and it could also happen when you are resolving your tax payment issues. Secure your Social Security card and other related documents. Keep your SSN safe, too; one easy way to do that is by leaving it at home in a binder. Carrying it around with you is a bad idea. You can also request an Identity Protection PIN from the IRS if you are deemed eligible to receive one.
Unpaid Taxes and Your Credit Score
It’s easy to assume that unpaid taxes damage your credit score. That’s nothing to worry about since it is a common misconception. These days, tax liens are excluded from your credit report. Even so, those liens can affect your credit score in other ways. For instance, you might not be able to get a loan, personal or otherwise. A taxation dilemma can make you delinquent on bill payments, which can also torch your credit score.
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We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on Facebook, Twitter, YouTube, and LinkedIn.