Tax mistakes happen. Unfortunately, even innocent mistakes can quickly become costly! If you make a mistake on your taxes, or if you fail to file, you will incur tax debt. This debt typically grows even more because the IRS will assess penalties and interest that continue to accumulate as long as the debt is outstanding.
When you owe money and the amount you owe keeps growing, it can be extremely hard to see a way out. The IRS does, however, offer a number of different options to help individuals and businesses pay off tax debt. One of the most frequently used options is an installment agreement.
This is how an installment agreement works: you arrange with the IRS how much you can pay each month, and you make regular payments to resolve your tax debt over time. This is a great way to pay off tax debt even it you can’t pay what you owe all at once.
The key element to remember regarding an installment agreement is that it does not stop penalties and interest from accruing. Much like credit card debt, interest is still charged on your account balance. As you make payments, though, the amount you owe will shrink, meaning that interest and penalty charges will progressively shrink, as well.
If you need assistance managing your tax debt or setting up an installment agreement with the IRS, contact the team at Taxation Solutions, Inc. We offer tax resolution, planning, and filing services to Orlando residents and can help you get your tax situation back on track. Call us today!