One of the most difficult experiences that an American can go through is falling behind on their taxes. The Internal Revenue Service (IRS) can be a formidable entity to tangle with, but there are options available if the debt that you owe is out of your reach. One such option is the irs debt settlement program. In this article, we’ll be discussing the process of calculating your eligibility for this program.
The IRS Tax Settlement program allows you to negotiate with the IRS and come to an agreement on repaying the amount of taxes that you owe. To be eligible for this program, your total tax debt must exceed ten thousand dollars. Also, the debt must have been accrued in either of the previous three tax years or less. In addition, you must be either unemployed, earn a low income or be able to prove that paying the full amount would cause undue financial hardship.
In order to apply for this program, you’ll need to fill out Form 9465 which is known as an Installment Agreement Request. This form will enable you to set up a payment plan with the IRS, wherein you will make regular payments towards your debt. The amount that you’ll be required to pay monthly depends on the specifics of your situation.
The first step in calculating your eligibility for an IRS Tax Settlement is to determine how much you owe the government. The process varies depending on the type of tax that you owe, but generally speaking, you’ll need to examine your most recent tax return to see how much you owe for each year that you’re attempting to settle. Make sure that you have copies of any correspondence that you’ve received from the IRS, as well.
Next, you’ll need to examine your current financial situation and determine whether or not you’re capable of paying off the debt that you owe within a reasonable timeframe. In order to do this, you’ll want to create a budget that takes into account your monthly income and expenses. Be sure to factor in any potential changes in your income over the next few years.
Once you’ve calculated your monthly expenses, you’ll want to examine your assets and liabilities. This may include your home, your car, your bank accounts, your retirement savings, and any other investments that you may hold. Be sure to include any debts that you’re currently paying off, such as credit card debts or student loans.
The final step in calculating your eligibility for an IRS Tax Settlement is to estimate your current and future income. This could include any raises that you’re expecting at your job, any secondary sources of income that you hold, and any anticipated inheritances or other lump-sum payments that you may receive. Be sure to take into account any potential changes in your income, such as retirement or a change in jobs.
In conclusion, calculating your eligibility for an IRS Tax Settlement may seem like a daunting task, but it’s a necessary one if you’re struggling under the weight of unpaid taxes. By examining your income, expenses, and assets, you can determine whether or not you’re a good candidate for this program. If you’re unsure of how to get started, don’t hesitate to seek out the assistance of a qualified tax professional. With their help, you can potentially reduce your tax debt and regain your financial freedom.