The new tax laws may make life difficult for some taxpayers, which is surprising. These new laws have been continuously applauded as a success for taxpayers who feel like they are paying too much, but it seems like they are not meant to help ordinary Americans.
The reality is the changes are not only affecting refunds; they are also causing more Americans to owe money.
At the moment, refunds seem to be down 8.4 percent, which is significant. What is worse is that the people who owe may not be able to pay Uncle Sam.
Why Does Owing Uncle Sam Mean Trouble?
There is no doubt that working families across the United States like in Nevada or other regions of the country are going to have to deal with the consequences of the new tax changes. Obviously, most people are not going to be happy because they owe more this time around, but that is not the main problem. The issue that could make this regrettable change worse is that most American families are living paycheck to paycheck.
One may assume that only those living under the poverty line are having financial trouble, but the truth is even those in the middle class are living paycheck to paycheck. This means that resources are already stretched pretty thin for most Americans, and an IRS debt could devastate them.
Keep in mind that some regions of the country will likely be affected by this change more than others. For example, data shows that some residents of Nevada have little financial literacy and the worst debt ratio in the country. The data is very telling, and it exposes how hard these new changes might hit the people of this state.
No one is saying that people are helpless; for instance, litigious folk can contact an experienced lawyer to help them fight these types of debts or at least have them reduced. Those going down this route must make sure the lawyer is local because each state has its own laws, so for those in Nevada, look for a Nevadian lawyer.
Who would have imagined that removing personal exemptions and discontinued deductions would affect Americans across the country so much.
What can People do?
There are a lot of steps that can be taken, from budgeting to hiring a personal CPA or tax expert to ensure that next year’s taxes are a little better. One thing taxpayers cannot do is delay filing their returns because they are afraid of what might be owed. The IRS does not like delays and may impose additional penalties on late tax returns. Taxpayers already struggling do not need to earn penalties, so make sure those papers are filed on time.
Furthermore, it is important to understand that the IRS actually appreciates any payments due to them. Sure, this conversation may be uncomfortable since it is hard for hard-working Americans to admit that they need help, but it is a necessary conversation. The IRS is reasonable and will likely work with whomever is willing to work with them.
Those who are in dire financial hardship may actually be able to request a hold on their debt. This hold is referred to as the “currently not collectible” status, and it can help Americans in trouble. Now, getting the IRS to accept a person’s financial hardship is not easy, so it is best to contact a lawyer to make sure there are no missteps that could make it hard to earn this status.
It is important that Americans understand that the debt-relief industry is out there. They want people to know they can simply call their state or the IRS to work out a deal. Debt-relief companies will tell Americans they can make things better if they owe the government; these companies are acting as the middle-man between the government and the person that owes money.
There is no telling how long Americans are going to have to deal with these new tax laws, but hopefully there is relief for taxpayers down the line. Thankfully, Americans can still wiggle themselves out of this kind of debt with the right information.