important tax planning strategies

Some Important Tax Planning Strategies You Should Know

Tax Preparation

Being in debt is just the worst. Credit card companies do their level-best to keep people in debt by allowing a “minimum monthly payment,” which essentially ensures that you will never stop paying the credit card company massive amounts of interest.  

Having a tax debt can feel the same way. Somewhere in the back of your mind, you worry that there is an Internal Revenue Service (IRS) agent out there who is looking to pounce because you owe a substantial tax debt.  

Indeed, the cloud that hangs over your head when you are in debt is stressful, and that can have negative effects on your health and well-being. It is an ongoing challenge to constantly feel that you can never get out from behind the proverbial “8-ball.”  

We understand how frustrating and stressful tax debt can be.  That is why, in this article, we will talk about some tax debt planning strategies that are available to you. These strategies are offered/approved by the IRS, and they allow you to confront any tax debt issues in a reasonable amount of time – not just a demand for a lump sum payment. If, after reading this article, you would like to discuss your own tax debt planning in Sarasota, we invite you to call the IRS problem-solving services firm – the Law Office of Mary E. King, P.L.  

The Law Office of Mary E. King, P.L. can make sure that your tax debt planning in Sarasota is resolved efficiently and at the lowest cost to you. Please fill out our online contact form, or call us at 941-906-7585 today.

The IRS Tax Debt Plans

The IRS has fashioned several tax debt planning approaches depending upon the amount that you owe. There are four main types:

1. For Those Who Owe Less than $10,000

If you owe the IRS less than $10,000, then you should be able to take advantage of the “short-term payment plan,” also known as a “guaranteed installment agreement.”  

This type of plan allows you to pay your full tax bill, plus interest and penalties over the course of 120 days, or about 4 months. It costs nothing to set up this type of payment plan and you can pay in the following ways:

1. Using the IRS Direct Pay system
2. online or by phone with the Electronic Federal Tax Payment System
3. By check or money order
4. By debit or credit card (though you will need to pay an extra fee)

2. For Those Who Owe Less than $50,000

If you are able to pay the full amount over time, then the IRS has a “streamlined installment agreement” for you. This type of installment agreement does not require you to provide any kind of financial disclosures, which is a plus. You can choose a payment plan of up to 6 years.  

The catch here is that if you choose a longer-term within which to pay, then your monthly payments are lower, but the interest and penalities will be higher. Conversely, if you choose a shorter term, the monthly payments are higher, but other costs go down. Your goal should be to keep the payment term as short as possible to minimize cost, yet still stay in your budget.

3. For Those Who Owe More than $50,000

For those who owe more than $50k, then there is a “high-debt installment agreement” available to you. This type of agreement requires extensive financial disclosures, and the IRS will make a determination as to the monthly payment you can make over time. With this plan, you will not be able to pay online.

4. For Those Who Can’t Pay the Entire Amount

If you are simply unable, given your current financial situation, to pay the full amount, then you might be eligible for a “partial payment installment agreement.” This is not a guarantee.  Rather, the IRS will essentially scrutinize your entire financial picture with a fine-toothed comb. The monthly payment will then be tied to your ability to pay. With this plan, you essentially will be paying some amount per month until the statute of limitations runs, which is generally 10 years.  

Except for option #4, the options assume that you have the ability to pay the full amount. If you know that you cannot pay your full tax debt, then either option #4 is available, or you may want to consider an Offer in Compromise, which is a way to negotiate with the IRS to pay a partial amount to resolve your entire tax debt.  

Talk to a Tax Debt Planning Professional in Sarasota to Help You Get Out from Under Your Tax Debt

No question, a tax audit can be stressful. Yet, having a tax debt planning attorney in Sarasota at your side to advise you on options and strategies for responding to the IRS is invaluable during the audit process.  

Consider reaching out to the Law Offices of Mary E. King to help. Tax matters can be complicated, and thus, it is always helpful to have someone in your corner who understands the tax law and deals with the IRS on a regular basis. Indeed, beyond just the stimulus payment from the IRS, there could be other issues with which a seasoned tax attorney can help.  

So, when it comes to dealing with tax relief and tax litigation, you need to talk to a Sarasota tax law attorney who can help. Mary E. King has spent her career concentrating on tax law and can help you with tax scams in Florida and elsewhere. Attorney King has a wealth of information about what types of options would make the most sense for you and your business.

That helps explain why she’s received an A+ rating from the Florida Better Business Bureau. If you have a tax related issue – no matter how small or how large – setting up an initial consultation with Mary E. King, tax lawyer of Florida, is the first step you should take towards relief.

The Law Office of Mary King P.L. offers complete IRS problem-solving services including all areas from tax debt settlement to planning the most efficient tax strategy for individuals and businesses. Call us today to schedule an initial consultation. With years of experience as a tax lawyer in Sarasota for many clients, Attorney Mary E. King can make sure that your tax issues are resolved in your favor. Fill out our online contact form, or call us at 941-906-7585. Remember, at the Law Office of Mary E. King, we are focused on solving your tax issues for good.

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