A tax credit is similar to a deduction in that it reduces the amount of income tax the taxpayer owes. However, instead of reducing the amount of tax due before calculating the total amount owed (as with deductions), credits reduce only the final amount owed at the end of filing season). For example, if you were eligible for two $1,000 credits on your taxes this year\u2014one for having children under 17 years old and one for having been unemployed last year\u2014those credits would be applied directly against your total tax liability after all other calculations were made; they would not affect how much money was withheld from your paycheck throughout the year or how much.<\/span><\/p>\n

<\/span>\u00a0 \u00a0c. Tax exclusions:\u00a0<\/strong><\/span><\/h4>\n

Tax exclusions are the most common form of tax relief, depending on how you use them. Direct exclusions are provided by the Internal Revenue Service and can be claimed on your tax return to reduce the amount of taxes owed. Indirect exclusions are not provided by the IRS but may be used as a deduction.<\/span><\/p>\n

<\/span>2. Ways of tax relief for back taxes<\/strong><\/span><\/h3>\n

Under these categories, we have options like an installment plan, offer in compromise, IRS lie release, personal loans, and much more. Let’s get into more detail about them.<\/span><\/p>\n

<\/span>\u00a0 \u00a0a. Installment Plans:\u00a0<\/strong><\/span><\/h4>\n

The installment plan is a method of paying taxes. The IRS offers this tax relief to people who cannot pay their taxes in full when they are due but can pay them in installments over time. You may qualify for an installment agreement if you meet certain criteria, including having a low income or having financial hardship. If you do not qualify for an installment agreement, the IRS will not allow you to make monthly payments until your entire balance is paid off.<\/span><\/p>\n

<\/span>\u00a0 \u00a0b. Innocent spouse relief:\u00a0<\/strong><\/span><\/h4>\n

This allows you to file an amended return if your spouse filed a joint return and received a refund that was not rightly his or hers.<\/span><\/p>\n

<\/span>\u00a0 \u00a0c. Voluntary disclosures:<\/strong><\/span><\/h4>\n

Voluntary disclosures allow you to report previously unreported income or assets by filing amended returns and paying due taxes.<\/span><\/p>\n

<\/span>\u00a0 \u00a0d. Disclosure agreements:<\/strong><\/span><\/h4>\n

This allows you to disclose previously unreported income or assets by entering into an agreement with the IRS that requires paying due taxes and interest.<\/span><\/p>\n

<\/span>\u00a0 \u00a0e. Offer in compromise:<\/strong><\/span><\/h4>\n

The IRS offers an Offer in Compromise (OIC) to taxpayers who can’t pay their tax bill but have assets they can sell or liquidate. This offer is a payment plan that allows you to pay back your debt without going through the entire process of bankruptcy. While it may sound like a great deal, it’s only sometimes suitable for all taxpayers.<\/span><\/p>\n

<\/span>\u00a0 \u00a0f. Penalty Relief:<\/strong><\/span><\/h4>\n

If you have been charged with several penalties and high-interest fees for your delinquent tax payments, there is a possibility that they might be waived. To qualify, you must have what the IRS terms “reasonable cause” for your outstanding tax arrears. The agency provides scenarios such as a home fire, death in the family, or natural calamity. If you’re still determining if you’d qualify, there’s further information here.<\/span><\/p>\n

A <\/span>tax attorney <\/b>may assist you in determining if penalty relief or reduction may be available in your particular instance and increase your chances of obtaining one.<\/span><\/p>\n

<\/span>Conclusion<\/strong><\/span><\/h2>\n

You need to decide what kind of tax relief best fits your situation. If you are still determining which option will work best or want to be sure that you make all appropriate adjustments, you should consult someone familiar with the tax code.\u00a0<\/span><\/p>\n

Tax season can be stressful for many people, but with the right preparation and research, you can minimize some of that stress.\u00a0 In the end, Make sure to gather all your relevant paperwork and keep up with the new changes as they happen. And as always, don’t hesitate to ask questions if you have them.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Tax relief is a broad term for lowering your tax bill or giving back some of the tax you’ve paid. It\u2019s called “relief” because it lowers the total amount of taxes you must pay. The IRS offers several options for lowering or eliminating your federal tax burden. You can choose which option most closely fits<\/p>\n","protected":false},"author":130,"featured_media":13735,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[983],"tags":[1921,1920],"class_list":{"0":"post-13734","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance","8":"tag-irs-lien-release","9":"tag-tax-relief"},"yoast_head":"\n