If you missed filing your tax return last April 15, you still have time to file back taxes with the Internal Revenue Service. You may avoid penalties once you file your tax return, but you must do this before the Internal Revenue Service has notified you of your delay. You also have the option to request an extension if you are unable to pay your tax debt. By law, these options can be used to stop the Internal Revenue Service from applying levies, liens and wage garnishment.
The Internal Revenue Service uses wage garnishments to settle our tax liability. As long as they have proof you owe them money, you have no choice but to face facts and accept the wage garnishment. Usually 25% of your salary is withheld by your employer in order to pay your tax debt. This is the result of neglecting to resolve your tax responsibility with the Internal Revenue Service and puts you in a bad light with your employer. Wage garnishment is also applied to funds owed to sub-contractors causing full payment for services to be frozen.
Failure to file your income tax return on time is not a problem to be taken lightly. The consequences can place you in financial jeopardy for years. The Internal Revenue Service can not only break you financially, they can cause much personal stress that takes a toll on your family life and business success.
As much as possible, be willing to try any and all options to resolve your tax problems quickly. Once the Internal Revenue Service has implemented a wage garnishment, it can be years before you can take home a full wage. Keep in mind the Internal Revenue Service automatically assesses all applicable penalties and charges interest on the increased tax debt. This practice can set you up for a long, extended period of wage garnishment payments.
To avoid wage garnishments, worry and added costs, always file your tax return on time even if you are unable to pay the full amount of your tax debt. You are allowed to file for an extension that will give you time to make the payment; however, any late payment will be subject to accrued interest on the overdue balance. By filing an extension, you can stop penalties and wage garnishments.
Consult with a tax professional to discuss your best options.