Tax Refunds & Advice

Every year, millions of people wonder if they will owe the IRS more money or receive a refund check. And of course, the only way to find out for sure is to file your final return. If you find that you owe the IRS more money it is not the end of the world. That being said, you do need to pay what you owe. Remember, this is not something the IRS is doing to you; it is something you did to yourself. If you owe the IRS additional money it is because you did not pay enough in taxes during the previous year. Instead of getting mad you should pay what you owe while learning from this experience so it does not happen to you again.

If you owe more money you have two options: pay it in full or opt for a payment plan (often times through the IRS). Which option works better for you? Simply put, if you can pay your entire liability in full you should do so. This way you don’t have to worry about applying for a payment plan, and of course, having interest tacked on top of what you already owe. If you don’t have the money on hand you may want to opt for a bank loan as opposed to dealing directly with the IRS. This may help you save on interest, but you won’t know for sure until you see what both options are offering.

As noted above, there is no way of knowing whether or not you will owe the IRS more money until you file your final return. Keep your fingers crossed that you will receive a refund. If this doesn’t work out and you owe additional taxes you need to consider how you will pay and then take care of it before the deadline. 

Most people see the IRS as an evil entity that does no good. But of course, this is not the case. On Tuesday, during a teleconference, the IRS announced a plan to assist homeowners with federal tax liabilities who are in danger of losing their homes.

IRS Commissioner Donald Shulman explained the situation as “an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.” To go along with this he added that the overall goal of this move is to “balance our responsibility to enforce the law with the economic realities facing many American citizens today.”

As you can see from the above statements, the IRS realizes that collecting money and enforcing the law is not their only responsibility. They have realized that taking the proper steps can help many Americans better their financial and real estate situation.

Of course, homeowners who are interested in this have a few questions on their mind. Mainly, what changes are being made to ensure that this process moves forward soon enough and in a timely manner? Shulman said, “It currently takes about 30 days to apply for and receive either a discharge or a subordination of a federal tax lien. The IRS is committed to putting in place whatever resources are needed to speed this process up as much as possible.” Fred Schindler, the Director of Collection Policy, explained that the word “discharge” means the IRS will not excuse the debt but will remove the barrier of the lien.

Details have not yet been released on just how much the process will speed up. At this time, 30 days is entirely too long but it is not yet known how much time will be cut out.

All in all, it is good to see that the IRS is stepping in to help aid homeowners who are facing tough times. Additionally, this move should help to better the real estate industry which has taken a huge hit over the past few months. As this idea becomes more of a reality, in-trouble homeowners will find it quicker and easier to either refinance their mortgage or sell their property. 

Throughout the year, no matter if you are self-employed or work for somebody else, you should be paying taxes to the IRS. This is the law, and it is something that you should be doing if you don’t want to be in a bad position when you file your final return. Of course, there are some people who don’t pay enough in taxes out of every paycheck. In this case, the IRS is going to be asking for money at the end of the year. What will you do if faced with this situation?

Many people never plan for this situation because they don’t think they will ever have to deal with it. Unfortunately, things don’t always work out as you plan them. If you have enough money in the bank, you can quickly and easily send the taxes you owe and then leave well enough alone. But again, not everybody will find themselves in this position.

If you owe the IRS money but don’t have enough to pay in one lump sum, you should consider your options. Even though it may not sound appealing, the IRS will let you pay them a little bit at a time. If you are going to do this, you should be ready to pay interest on top of what you owe. While this may not sound fair, it is something that you will have to deal with if you are low on cash reserves.

It is always better to pay in full on time if possible. The IRS will work with you if you cannot afford to do so, but this is something that you would be much better off avoiding.