One of the most humiliating things to own up to is debt. None of us want to admit that we spent money so frivolously that we swept bigger things, like taxes, under the rug. And sometimes it is not even a matter of frivolous spending. Food, rent, transportation, and medical bills have a way of creeping up on us, and sometimes overwhelming us.
Get back in control. Taking ownership of debt, however difficult it may be, is key to working your way out of it. Take it in steps.
Face the Reality of Your Tax Debt
Irs problems are not going to go away. Taxes were in place even before 1776, when Great Britain taxed goods in the American Colonies. And federal income tax, directly imposed by the U.S. government, dates back as far as 1861 and the Revenue Act. It is safe to say that taxes are here to stay and, the sooner you accept that, the better.
Know the Fundamentals
Taxes can be confusing. Once you have owned up to tax debt problems, the next step is understanding a few basic things. Know that the federal government taxes anywhere from 10 to 39.6% of your income, and know what sorts of consequences you are going to face (or may be facing right now) from IRS back taxes owed. Levies, or legally seizing property or assets to compensate for debts, is one of the most common practices. Even so, the government must warn tax debtors about levies and give them the opportunity to have their say.
Do Not “Go It Alone”
One of the most common mistakes that tax payers make is trying to tackle tax problems and debts on their own. According to the Cato Institute, there are more than 1.2 million tax preparers out there, waiting to prepare your taxes and help with irs tax problems. Tax preparers can help you fix IRS problems, get out of that debt, and avoid it the next time around. More on this.