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Need guidance with options for paying income tax

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  • Need guidance with options for paying income tax

    I have about $3000 I owe in income tax from 2013 taxes, no other back taxes. I am trying to figure the best way to get those taxes reduced and set up a payment plan of some sort. How should I go about handling this and can I do it myself without hiring a pro?

    Did a small amount of research and found out about offer in compromise but I don't know if that is always the best route to take. I also saw that rules changes now have a 12 month rule(12 months x disposable income) payoff option as opposed to 48 months... can I go about setting this up myself and how do I calculate and prove what is my disposable income... can I still set up a payment plan for that 12xDI amount or do you only get a certain amount of time to pay it in full?

    With all my other bills, expenses, obligations, I can really only afford to pay about $50 a month to the IRS so I would love to prove my disposable at that amount. Am I correct that if I can prove $50 a month DI that I would have to pay 12x$50 and get my taxes reduce to $600?

    Any answers and advice on how to start and what to avoid doing is appreciated.

  • #2
    I can't offer advice, because I haven't been in such a situation.

    Have you contacted the IRS directly? That may be your best option.
    seek knowledge, not answers
    personal finance

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    • #3
      Originally posted by Cbuddy View Post
      I have about $3000 I owe in income tax from 2013 taxes, no other back taxes. I am trying to figure the best way to get those taxes reduced and set up a payment plan of some sort. How should I go about handling this and can I do it myself without hiring a pro?

      Did a small amount of research and found out about offer in compromise but I don't know if that is always the best route to take. I also saw that rules changes now have a 12 month rule(12 months x disposable income) payoff option as opposed to 48 months... can I go about setting this up myself and how do I calculate and prove what is my disposable income... can I still set up a payment plan for that 12xDI amount or do you only get a certain amount of time to pay it in full?

      With all my other bills, expenses, obligations, I can really only afford to pay about $50 a month to the IRS so I would love to prove my disposable at that amount. Am I correct that if I can prove $50 a month DI that I would have to pay 12x$50 and get my taxes reduce to $600?

      Any answers and advice on how to start and what to avoid doing is appreciated.
      Does the IRS take credit cards? Get a no-interest CC and put the entire balance on it, then pay it off at your leisure (but before the no-interest period expires).

      Edit: Googled it and the IRS does take credit cards (they'll take what they can get I guess). So yeah, that's what I would do personally.
      Last edited by Weird Tolkienish Figure; 09-04-2014, 06:24 AM.

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      • #4
        There are some tips to getting out of tax debt:

        Decide to to handle it with yourself otherwise hire a tax professional.

        If you haven't filed tax returns, you can still take every tax deduction you are legally entitled.

        Choose the tax debt plan that best suits your current financial situation.

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