Educational Tax Tip: Managing Late Payments on an IRS Installment Plan
Is there a grace period if you can’t make your IRS installment payment on the due date? Yes, the IRS allows a 30-day grace period to make your missed payment without canceling your agreement. However, this does not push back your next payment, and if the missed amount is not paid within the grace period, the IRS can terminate your plan. Reinstating a canceled agreement is not guaranteed and could result in severe financial consequences. To avoid issues, make payments on time and, if possible, pay more
Educational Tax Tip: Understanding IRS Notice CP75
Have you received an IRS Notice CP75 and you don’t know what to do? These notices typically request additional documentation to verify tax credits like the Earned Income Credit (EIC) or Additional Child Tax Credit (ACTC). If you receive one, read it carefully, gather the requested documents (such as proof of income or dependent eligibility), and respond by the deadline—usually within 30 days. Failing to reply could result in the IRS adjusting your return and reducing your refund. Need help responding to
Educational Tax Tip: How Can You Avoid an IRS Levy?
Worried about an IRS levy? The best way to prevent one is to file your tax returns on time and pay what you owe. If you can’t pay in full, don’t ignore IRS notices—pay as much as possible and explore options like a payment plan or tax relief programs. These might allow you to settle your debt for less or make monthly payments, but you must act quickly. Receiving a Final Notice of Intent to Levy means time is running out, so contact a tax professional immediately to get help Need help dealing with an IRS
Educational Tax Tip: Filing Taxes When You Owe the IRS
Owe taxes from previous years and wondering if you should still file your current return? The answer is yes! Failing to file only makes things worse—the IRS imposes a 5% penalty per month (up to 25%) on unpaid taxes if you don’t file, plus interest on the balance. Even if you can’t pay in full, filing on time helps reduce penalties and keeps you compliant. The IRS also looks more favorably on taxpayers who stay current with their filings when considering payment plans or other relief options. Ignoring tax
Educational Tax Tip: How IRS Wage Garnishments Work
Have you ever wondered how the IRS can garnish your wages? The IRS tracks your income through Forms W-2 and 1099, allowing them to identify your employer and issue a wage garnishment if you have unpaid tax debt. Before taking action, the IRS typically sends multiple notices over several months, giving you a chance to pay or appeal. If no action is taken, the IRS sends the garnishment notice directly to your employer—who will then inform you of the deduction from your paycheck. Facing IRS collection
Educational Tax Tip: Short-Term vs. Long-Term IRS Payment Plans
Do you know the difference between an IRS short-term payment plan and a long-term payment plan? A short-term plan lets you repay your tax debt within 180 days with no setup fee, while a long-term plan allows for monthly payments over more than six months but includes a setup fee, which is reduced if you choose automatic Direct Debit payments. Both options accrue penalties and interest, so paying off the debt as quickly as possible is always best. Need help choosing the right payment plan? Visit our
