Settling the tax debts of your own accord
There are many who may have had problems in paying down their tax debts; you are not the only one. So, there’s nothing to feel lost or dejected about this. If you owe quite a large amount in tax debt, there are some options which can help you solve the tax debt problem. The two main options are the installment payment option and the other is the settlement payment option. There are again various options under these two options, which you can avail of in order to pay off your tax debts. The tax debt settlement options work to help you down most of the tax debts.
Settling IRS tax debt
Some of the options under which you can settle your tax debts are:
1. Compromise offer – Offer in compromise provides the option to settle tax debt where you can pay less than the full amount owed. If you cannot pay off the taxes in full, you can try out this option. The circumstances which are considered to determine if you can make payments under this option are:
- Your ability to pay
- Your income
- The expenses and
- The asset equity
2. Penalty reprieve – If there are options for you to prove that there are valid reasons due to which you are having problems in paying down the IRS tax debt (due to non affordability), the IRS may allow you the penalty reprieve. At the least, on an approximation one-third of the tax debt penalty amount resulting out of non-payment of the taxes, may get abated by the IRS later. This significantly lowers the debt amount with regards to the taxes owed by you to the IRS.
3. IRS tax bankruptcy – If you think that you are going to qualify for the Chapter 7 bankruptcy, you can consider trying out this tax debt relief option. It is only the income taxes which can be discharged through bankruptcy, and that too the recent ones. In order to decide as to which of the tax debts can be included in a bankruptcy program, you can talk to your bankruptcy attorney. He/she may let you know about the requirements or the eligibility criteria for including tax debts in bankruptcy. However, you need to know that this definitely cannot be considered as a good option as always, because bankruptcy has a high negative effect on the credit and almost all your assets are going to be liquidated through this.
There is also the option for you to get the help of a tax professional. He/she may help you with settling the tax debts, and therefore help you in solving the tax debt issues. This process won’t be highly different than a debt settlement program, though the types of debts are different. So, these are the options you can have under the tax debt settlement option, and if you are having problems in managing your tax debts, you can try out these options based on the tax debts owed by you, and the level of your affordability.
George Adams is an independent Financial advisor and attached to some financial communities. He has vast knowledge in debt consolidation, debt settlement, etc. For information on debt settlement please visit here: http://www.debtconsolidationcare.com/de … ement.html.
Categories: Federal Tax, Income Tax, State Tax Tags: federal income tax, federal tax, income tax, tax code, tax law
A half century of Federal income tax changes for individuals
Federal income tax changes for individuals are linked to the first five income quintiles over the last half century and there are many things to observe from it. First, we have noticed that everyone loves the income tax cutting. Most of the changes are tax cuts, which are mostly for the bottom 80% of the population based on income.
Key point to note is that tax cuts are always good news for top income earning groups, because they pay more from their earnings and federal income tax cuts pay more in return. In 2009 and 2010, the top 10 percent income earners paid roughly 70 percent of federal income tax, a major cause of income inequality in United States. Some tax cuts are more broad-based as compared to others, like major federal income tax cuts in 1964 and 2001. If we compare them to 1982 and 2003 tax cuts, the prior tax cuts were broad based.
Former President Bill Clinton raised federal income tax from 36 percent to 39.6 percent for top earning groups in 1993 and decreased the percentage of tax to be paid by lower earning groups. The economic growth, more job opportunities, substantial growth, recessive quarters and no empirical support also affected the federal income tax percentage. Currently a summary was published by New York Times Economix, in which there is a long detail of half century individual federal income tax changes.
Categories: Federal Tax, Income Tax, State Tax, Tax Law Tags: federal income tax, federal tax, income tax, tax code, tax law, tax reform
79 percent say all Americans should pay federal income taxes
Fox news reported that majority of Americans agree to pay federal income tax, though it may be as little as 2 percent of their earnings. According to a Fox news poll released on Thursday, 19 percent of Americans have agreed that they should pay something for federal income tax. Among these voters who favored the federal income tax, 71 percent are Democrats, 83 percent are Independents and 85 percent are Republicans.
IRS announced that 41 percent of the tax fliers didn’t pay the federal income tax last year. It was estimated by Tax Policy Center that non-payers percentage will be increased to 46 percent next year. Most of the voters are those who have come across Republican nominee Mitt Romney’s broadcast video where he remarked that about “47 percent of Americans” don’t pay federal income tax. During presidential campaigns, Mitt Romney also commented that USA is becoming an entitled society and most are dependent on the government. Still 63 percent of Americans think that what Mr Romney said has certain truth in it.
On average, three out of four voters believe that Americans are somewhat dependent on the government. About 46 percent of the voters think that federal government is doing too much nowadays. Only 22 percent of Americans thinks that federal government is doing only a little. The online poll has divided the citizens between federal income tax payers. These voters were all registered voters who also voted for the U.S presidential election.
Categories: Federal Tax, Income Tax, State Tax, Tax Law Tags: federal income tax, federal tax, fiscal cliff, income tax, tax pledge, tax reform, tax the rich