New tax laws went into effect last year. The hype was that American families would be getting more back in their paychecks. What they failed to mention is that it would heavily impact the amount of taxes owed come tax time. If you just finished filing your taxes and you discovered that you not only are not getting a refund but that you are also paying in a hefty sum, you are not alone. Here are a few other surprises, as well as how you can counter the issues you are facing with having to pay into the IRS this year.
Almost ALL Middle Class Families and Some Lower Class Families Have to Pay
Accountants and tax prep companies are reporting a major increase in middle and lower class families that are stunned about having to pay in this year. It is not just a few hundred dollars either; most are finding that they have to pay in in the thousands. Considering that Americans were definitely not expecting this, they did not put aside the "extra" cash that was left in their paychecks to make up for the amounts they now have to pay the government. The state taxes are also higher, meaning that most people will not see a slight reprieve by getting a state refund and using it to pay the federal bill.
Your Options under These Circumstances
Really, you do not have many options. You can pay the bill, file for a delay to pay the bill, ask for a payment plan to manage the bill, or if the bill is so extraordinarily high that there is no end in sight for paying it, consider bankruptcy. The government hates to see tax bills filed under bankruptcy, so they try really hard to help make payments manageable for families. If they do not budge and will not help, a bankruptcy lawyer will help. The bankruptcy lawyer can file all kinds of paperwork to eliminate not just the tax bill, but also other debt (sans school loans and your mortgage, of course).
Choosing Bankruptcy
It is a two-edged sword. Filing for bankruptcy will hurt your credit for the next seven to ten years. However, it will eliminate the tax bill debt you owe. Maybe that is a message you want to send the government in response to how the tax laws failed. Moreover, it will definitely help you prepare for next year's tax bill because you know that you will have to set more money aside after your bankruptcy is complete.
Contact a bankruptcy lawyer for more help.
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