There are only two certainties in life: death and taxes. What a macabre thought. But, if you want to remain in a financially stable position, you need to ensure that your taxes are paid. The IRS will soon be issuing letters and notices to those who have fallen behind with their taxes. You need to treat your tax bill like any other debt. You need to ensure that it is paid in a timely manner to avoid any penalties that may be incurred.
The IRS: Their Powers
The IRS can garnish your wages if you owe a substantial amount on your taxes. You will not have a say on the amount that is taken. The amount is garnished is significantly higher than what you would voluntarily give.
While this may sound like doom and gloom, there are some things that you can do to ensure that the IRS do not garnish your income. You can avoid wage garnishment easily.
Tax has to be paid. You will have to prepare your tax return and ensure that it is paid in a timely manner. If you owe more money than you anticipated, the IRS will alert you to the shortfall. You can clear the amount with immediate effect, should you have the cash available. In the event that you do not have the money to give them, you can set up a payment plan or make a settlement offer. For those in severe financial difficulties, you can file for bankruptcy. Of course, this should only ever be treated as a last resort.
The worst thing that you can do is to ignore the IRS. This is where the process can become complicated.
The Collection Process: What Happens Next
The IRS cannot garnish your wages without providing you with due notice. You need to set up a repayment plan that suits you. You will be issued with letters and notices informing you of your debt. If you do not respond to these notices, or cease to pay your debt in a timely manner, the IRS wage garnishments will come into effect. They can look into your assets and income and take the money that is owed regardless. In short, this is a way of forcing people to pay their tax debts.
IRS Garnishment Process
The law states the IRS can take as much as they want. They are only obliged to leave you with a portion of your income. The IRS will, legally, take as much from your wage as it can. This may only leave you with a small proportion of your income. This is usually deemed as what is needed to live to a primary standard. This amount can be as much as ¾ of your income. This is a sizeable chunk of cash to give to the IRS. What is more, you will have very little say on how much is taken.
Avoiding Wage Garnishment
You can effectively avoid wage garnishments from the IRS. If you are experiencing difficulties paying your taxes, contact the IRS as a matter of urgency. This matter will be dealt with accordingly.