tax debt relief<\/a> opportunities so that you can live the next year burden-free!<\/p>\n\n\n\nTax Debt 101<\/h2>\n\n\n\n
Before we look at ways to get out of tax debt, let’s talk about how it accrues.<\/p>\n\n\n\n
Every year, American citizens are required to file their taxes before the national deadline of April 15th. For many citizens, filing taxes means a refund from state and federal governments.<\/p>\n\n\n\n
But for others, it may involve owing a balance to the IRS. A lot of individuals may not be able to pay this balance at the time of filing their taxes, or neglect to pay it for various reasons.<\/p>\n\n\n\n
Others may simply not file their taxes at all. In this case, the IRS files a substitute tax return for you and estimates your tax liability. However, the IRS won’t incorporate any deductions that you are eligible for in this situation.<\/p>\n\n\n\n
Any tax balance that goes unpaid to the IRS becomes debt. Typically, the IRS will charge a 0.5% penalty on this balance, in addition to interest.<\/p>\n\n\n\n
However, if the individual fails to pay off this balance over time, this penalty can rise to as steep as 25% of the balance itself. What’s more, accrued tax debt can impact your credit score negatively.<\/p>\n\n\n\n
This entire time, interest continues to build.<\/p>\n\n\n\n
This can be incredibly intimidating to people who simply don’t have the financial means to pay off this debt when it’s due. For others, it can feel like a neverending cycle of debt without any form of relief.<\/p>\n\n\n