5 Tips for Paying Off Tax Debt ASAP

4 min read

Dealing with tax debt can be stressful, but ignoring it only makes things worse. The good news? You have options. With the right approach, you can tackle your tax debt head-on, avoid unnecessary penalties, and get back on solid financial footing. Here are five smart strategies that could help you pay off what you owe, without the added stress.

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Explore tax debt relief options

Depending on your circumstances, you may qualify for tax debt relief. If you’re facing financial hardship, recovering from a natural disaster, or simply dealing with an overwhelming balance, be sure to research the options available to you. Many taxpayers are able to reduce what they owe, set up a manageable payment plan, and even pause collection efforts while they get back on their feet.

Stop wage garnishment and bank levies

When tax debt isn’t paid in a timely manner, the IRS has the power to take drastic measures, like garnishing your wages or freezing your bank account. These actions can make an already stressful situation worse, leaving you struggling to cover everyday expenses. Seeking tax relief can help give you breathing room to work out a more manageable repayment plan.

Set up an installment plan

If paying your entire tax bill at once isn’t realistic, the IRS may offer you an installment agreement that allows you to break your debt into smaller, more affordable payments. Depending on how much you owe and your ability to pay, you may qualify for a streamlined agreement that doesn’t require extensive financial disclosure. Even if you can only afford the minimum payment, committing to a structured plan can help you avoid penalties and collection actions while you work toward paying off your balance.

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Consider an offer in compromise

For those experiencing significant financial hardship, the IRS may be open to settling your tax debt for less than the full amount owed. This is known as an Offer in Compromise, and while not everyone qualifies, it can be a game-changer for those who do. The IRS considers factors like income, expenses and asset equity when determining eligibility, making this an option worth exploring if your debt is truly unmanageable.

Don’t wait

The longer tax debt goes unresolved, the more it grows. Penalties and interest pile up quickly, so the key is to take action as soon as possible. Whether it’s setting up a payment plan, seeking penalty relief or negotiating a settlement, the quicker you act, the more options you’ll have — and the less you’ll end up paying in the long run.

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Anthem’s Disclosures:

*Anthem offers a money-back guarantee designed to help you avoid wasting money on ineffective tax services. They will gather as much information from you as necessary and work with tax authorities to give you the best chance of reducing your tax debt. If for any reason that does not work out, and the government refuses to reduce your overall tax liability or monthly payments by any amount, Anthem will refund you the fees you paid for their services in trying to reduce that debt.

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