“Tax Relief” sounds like a sweet, non-tax related word. Yet tax relief is in fact an essential part of our country’s tax system. It can literally mean the difference between life and death. The tax relief provided by the federal and state governments help taxpayers mitigate their financial hardships as a result of tax debt.
Tax relief is available to taxpayers who: a) have incurred tax debt but want to retain ownership of their asset(s), or b) want to start afresh financially but owe back taxes on previously owned assets. For qualifying applicants, the state can actually pay for most or all of a tax debtor’s property taxes (including mobile homes) according to the highest allowable amount of Tax Relief Credit available in relation to that tax’s total liability. Applying with the IRS for tax relief is a very involved process. It’s important to hire a tax professional with tax experience to represent your interests as well as be on the lookout for any possible trickery or traps. So before you even begin the process, find out what you might need to do as a tax debtor to be eligible for tax relief.
The tax relief system is designed to help taxpayers manage their tax debts in a way that meets their needs without putting them in a situation in which they have to pay what they really owe. Many tax credits exist and are based upon various criteria, including age, income, location, filing status, etc. There are special tax credits for certain charitable contributions, interest on mortgages, interest on dividends and loans, state and local taxes, purchases made abroad, some investment and retirement accounts, income from rental properties, and “orphan” status. If you fall into any of these tax relief categories, you may qualify for some or all of these benefits.
One of the primary reasons people don’t usually think about tax relief is that when it is billed in dollars, it looks like more tax bills. When you look at it that way, though, you’ll see that the dollars will actually make you feel better than the tax debts you owe. When you add up your tax debts in the form of tax penalties and interest charges, on the other hand, it’s easy to see why they can be overwhelming. You may get some relief by paying a portion of what you owe.
Another tax relief that some people overlook is installment agreements. Installment agreements (PA) work by allowing you to pay back taxes through installments. In many situations you would face enormous tax debts if you just stopped paying, but with an Installment Agreement you continue to pay until the full amount is paid back. You also keep from owing extra money because you aren’t required to pay the full amount right away. This means you don’t build up more tax debt overnight, making future payments easier to budget.
There are other tax relief options that you can also consider. One of the most popular tax relief options available is what is known as an itemized deduction. Basically this means you deduct what you spent on things such as rent or mortgage interest. You can also take advantage of tax deductions for many types of purchases, such as car repairs and home improvements.
The third tax relief option that you may want to consider is tax exclusions. Tax exclusions are simply reductions that you get on your tax bills for amounts that exceed a set limit. For example, you can get tax relief for expenses that are related to a covered illness, qualified travel, and home office expenses. Tax exclusions can save you a lot of money, especially if you are trying to get ahead. However, you need to be careful to read the terms of the exclusion carefully so that you know whether the amount you are excluded from paying taxes on is enough to help you make ends meet. Also keep in mind that tax exclusions are only available if you are claiming an exemption, not if you are only claiming it because you are unemployed.
If you would like to take advantage of all three of these tax relief strategies, then you will likely need to turn to professional tax relief companies. There are tax relief companies available for just about any tax problem you might have. However, there are a couple of things to keep in mind when using professional tax relief companies. First, not all tax relief companies are created equally. You will need to do a little research to make sure you are dealing with a trustworthy company that will help you solve your problems with the IRS in a way that makes sense for both you and them.