Because Freedomtax’s IRS Enrolled Agents are experts at tax relief services, we know that falling into debt of a monetary kind can be bad. Whether it’s only a small amount or a large one, a debt can ruin your life, your business and your credibility with others. There is a rather taboo concept that defines debt as shameful in today’s society and if you can’t run your finances smoothly, it can often come off as a sign of irresponsibility and not everyone would want to be associated with a person like that.
Even worse than owing a debt is when you owe a tax debt to the IRS. People also seem to be able to understand why someone might fall into debt through a house mortgage or a student loan, they are understandable necessities. However, if you don’t pay your taxes and accrue a formidable amount, don’t expect any sympathy from your fellow man. Taxes are a yearly bill applicable on almost every citizen in some way or other. When everyone pays, it means that everyone is shouldering their weight responsibly.
Apart from getting the boot from normal society, here are the following ways that a tax debt can ruin your life:
Tax Debt Penalties and Interest
When you fall into debt because of your taxes, the IRS makes sure to teach you a lesson you won’t be forgetting easily by applying penalties and an interest on the amount you need to return. This means that every day you don’t pay your taxes, your tax debt amount rises. Even if you notify the IRS and ask for a time extension before hand, you are still liable to pay the taxes which are subject to changes.
Ignoring it Won’t Make it Go Away
Sometimes, when problems and stress get too much for people to handle, they tend to block out the source of any disturbances. Unfortunately, most people tend to apply this towards stressful situations like a tax debt. This is not the best mode of action since the IRS can and will prosecute and pursue you mercilessly. The IRS also applies an interest on the amount owed which not only raises the amount that you must pay but the IRS also has its own rules and regulations and most often they place an interest based on the amount owed.
The Debt Cycle
When you owe taxes, the ruthless reputation of the IRS can make you want to pay off the debt as soon as possible. However, if your limited means are not enough, you might have to borrow or take a loan. This can allow you to be free of the IRS but this also means you successfully get rid of one creditor and acquired another. If you keep on taking loans to pay off other debts, you will always be getting into a new debt. Unless you grind down and work to pay off the debt you will be in a debt cycle which can progress from tax debt into a completely different debt.
However, even though debt can ruin your life, there are still feasible ways of getting the situation under control. If you require any more information regarding tax returns, tax debt payments and procedures; please feel free to contact us at 407-344-1012 for more information.