Monday, April 20, 2015

Settling Your Tax Debt before Retirement

Retirement planning should start years before you’re ideal retirement age, and debt settlement should definitely be a part of the plan. To be stress-free and comfortable once you do retire, you shouldn’t have to worry about how to come up with money to pay off those debt or what you would have to be burdened with when you can’t pay.

One of the things you should sort out as a priority before retirement is settling your tax debt. Unlike other creditors, the IRS has a range of aggressive collection techniques that can make your retirement years less than “golden”. Be aware of the possible consequences of unpaid taxes, so you can sufficiently prepare to avoid them.

Among other things, the IRS could seize and sell or levy your sources of income or savings (including your dividends and bank accounts) and your possessions. Like other types of debt, the back taxes can also give you a poor credit score, which can make it difficult to secure financing for a new home, car, or whatever else you fancy in your retirement. If you want to have all your money and properties intact, and if you want to have a good credit standing, you better settle your tax debt.

If you don’t have enough money to satisfy the debt, you may be able to settle your debt for less than its total value through an offer in compromise. An experienced tax attorney can guide you through the process and negotiate for you.

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