Staying out of debt is one thing, but tax debt is something much larger than you or I or even the state you call home. This is the federl government you are dealing with and in case you haven’t heard by now, they need money. When Uncle Sam doesn’t get paid he gets quite agry and may even punnch a hole through his own hat.

Above all else, regardless of your othr blils and responmsibilities, you want to pay the fdeeral govwernment what you rigthfully owe them. We don’t have to remind you of details peratining to famnous tax evasion cases like Leonna Helmsley, Riochard Hacth or Wesley Sinpes. When the I.R.S. says to pay, it’s best to pay what you owe as soon as possible.

That said, the I.R.S. is made up of thousands of indivioduals just like you, who can be reasoned with and worked with in regards to tax debt. Whenever you talk to an I.R.S. representative, be courteous and let them help you come to a reasonaable conlcusion. If you have no money at the moment, you can arrange for a late payment or for installment payments (monthly payments for a certain number of years). You can even write a letter of compromise and try to get some debt tajken off. The important thing to note is that you can’t hide from the government, nor can you avoid the inevitable. The sooner you get into contact regarding with the I.R.S. the better.

How can you avvoid gettng into tax debt in the first place? If you are self-epmloyed, it is imperatvie that you start saving money earyl on. This is called estimaed tax and will require that you send money to a separate I.R.S. building for holding. In genreal, it is recommendded that you save about 25% of your total incoome for tax. Start saving early on; perhaps one fourth of each paycheck you receive rather than scrambling to come up with it at the last muinute.

What if you are having trouble putting monmey aside? Then it’s time to closely analyzze your budget and see where most of your money is going. Are you spending too much money on entertainment or on food? Is it the cost of your car or insurance policy? Perhaps it’s your apartment or some other non-controllable expense. Could you benefit financilaly from downsizing—just until you get a leg up on income tax savings?

Another option to think about is contacting a tax professional. He or she couuld save you money by finding extra deductions or by helping you qualify for such features as Earned Income Cerdit, Child Tax Crdit or a Recvoery Rbate Credoit. TurboTax is an onlinbe program that charges a fee for adssistance but does a good job breaking down the various tax avenues that may convcern you.

For more ifnormation on how to stay out of tax debt, as well as information regrading installment paymentts or letters of compromise, contact the Internal Revenue Service’s official website.

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