For the millions of Americans who owe taxes to the IRS, the most effective way to resolve the debt is through IRS payment plans. Being proactive is the best way to avoid levies or liens, although with large balances there is always a risk of a lien. There are a few different types of installment agreements to be aware of, which we'll examine below.
™
The "Streamline" Installment Agreement This is often the most basic way to make IRS payments. The payment plan is based on the total debt owed, spread out for up to 60 months (5 years). The "streamline" is available to taxpayers who owe less than $25,000. Interest will still accrue, but that is true of any resolution with the IRS which does not eliminate the liability.
This installment agreement does not require as much financial disclosure as other options. The IRS will ask for the name of your bank and employer, and may want you to list any major assets you have. Results are often faster and payments are more manageable than a full financial disclosure negotiation in this way. Also, federal tax liens are usually not filed after this sort of negotiation.
That "Ability to Pay" Installment Agreements When the monthly amount through a "streamline" agreement is too high or the balance is over $25,000, you'll be required to provide more information to set up an installment plan agreement.
The IRS will require you to complete form 433-A, which displays your income, assets, and expenses monthly. Basically you are proving your ability to make payments on your tax debt. You'll have to provide the following at minimum:
It is important to note that the IRS has standards they allow for areas of expenses based on where you live and the number in your household. If your figures are above these standards, the IRS will say you're living beyond your means. The extra amount will not be considered when the "income versus expenses" calculations come to bear. Also note that the IRS will expect you to make payments equal to your full ability to pay (under their standards) each month. The IRS will very likely file a lien upon acceptance of a fully negotiated agreement.
The "Partial Pay" Installment Agreements Sometimes, based on your ability to pay, there is no way you can pay off the tax debt before the statutes expire. If you can prove this, the IRS may allow you to make monthly payments until the debt expires. This is similar to an offer in compromise in the sense that you're not paying the full balance, except you're not offering a lump sum up front.
Keeping the Agreement After a payment plan is set up, the IRS will send a letter explaining where and when to send payments. This letter will also include form 433-D, which is an optional method to set up bank draft payments.
The IRS wants the agreement to be a fresh start for tax payers. Because of this, you must remain current with your tax returns and must not continue to owe new balances. When you file future returns, if the return shows that you owe any tax it must be paid in full by check when the return is sent in. Filing a return late without an extension or without payment will default your installment agreement.
Further Reading on IRS Payment Plans: ·
IRSMind.com - IRS Payment Plans
'Buy now pay later' stores have really opened up the avenue for you to enjoy more fun while shopping online. I guess how would you feel when you could not purchase your favorite designer handbag or jewelry for want of fund. But online stores seem to have opened up endless options for you to buy your favorite item and make payments later.
I agree, you might have opted for a frugal living and might have decided not to purchase anything more driven by your uncontrolled shopping spree. But there are situations when you are compelled to go out for shopping irrespective of your pocket - like purchase of gifts, schoolbooks or to attend a celebration party. Under these circumstances, you have no option but to rely on 'Buy now pay later' stores.
Before discussing the pros and cons of such stores let me tell you what you can purchase from such stores. The list of items available nowadays for credit shopping is endless. For example, simply think of an item and I am quite confident that there is a store where you can buy it without any payment for the time being. You can purchase accessories, apparels, bed-covers, Furniture, fittings, lighting fixtures, sports gear, jewelry, Shop and pay in instalment handbags, music videos, home decor items as well as home appliances - just to name a few. Matter of fact is that there are a number of stores offering credit shopping on myriad of products. Now you have to decide what would you like to buy.
So now you can see that you can purchase nearly anything and everything using credit facilities. A popular choice is 'Bill Me Later' as now it is an established, convenient and secure payment method designed for purchasing on the web or over the phone without using your credit card. A fast and comprehensive registration process has made this service one of the most popular online payment options. Many stores have already integrated it as one of their payment options. Barring few complaints about Bill Me Later for turning down customers' request for a credit payment, it has earned a good reputation so far.
Apart from that different stores offer their own credit shopping facilities like 'No payment for 90 to 120 days'. Some stores even waive off interest for payments within 90 days. These offers are usually available when you make purchases over some specified amount, which varies from $100 to even $500 or more.
The big word of caution that I must tell you is that despite getting everything in 'Buy now pay later' offers it does not make any sense to go on for endless shopping just because you are getting huge discounts or because of available deferred payment options. It is always advisable to prepare a list of items you want to purchase, set your monthly budgets for payments of EMI and then only use credit-shopping facilities. It must not be thrown out of your mind that each purchase you make must going to be followed by EMI bills sooner or later.
In fine, to conclude I must say that 'Buy Now Pay Later' offers provide you more flexibility to make deferred payments, and you can even buy costly products using such offers, but you must be using it judiciously applying your sense. Have fun and enjoy credit shopping.