Top Tips for When the IRS Garnishes your Wages
Two words that no one wants associated with them: wage garnishment. If you are behind on paying back your taxes, the IRS can contact your employer and have your wages garnished. They send notifications leading up to this action, but it’s better to get ahead of the problem rather than let it ride out. Your employer has to comply with a wage garnishment and the IRS can take 25 percent or more of your income until your debts are paid off. It’s safe to say that this is not an ideal situation.
Wage garnishments only occur after you have not paid your taxes and have ignored the warnings from the IRS. When you receive notifications from the government, take them seriously. They will move more quickly than you think and then you’ll have fewer options. Fortunately, if you do face wage garnishment, there are options to delay the IRS or stop these proceedings altogether.
Pay off the debt. This tactic seem simple enough, but you may have been putting it off until you collected enough funds, or in some cases, you may have forgotten about the bill. Whatever the case may be, if you have the funds to pay from a bonus at work or borrowing money from a family member, pay your debt in full and these actions will cease.
Get a professional on your side. Hire a tax resolution services company to negotiate on your behalf. Depending on your situation, you may be eligible for an offer in compromise or some type of payment plan that can ease the financial strain of your tax debt. These types of companies are well-versed in how to handle these situations and can individualize a plan based on your current situation.
Plead financial hardship. If having your wages garnished leaves you without daily living expenses, this may delay IRS proceedings. However, you would have to meet their requirements and ultimately, it’s up to the IRS to decide. In this scenario, a tax resolution professional can act as a go-between for you and the IRS to negotiate time extensions or debt reductions.
Quit your job. This is not the most optimal choice, but if you switch jobs or quit your job, then it will take awhile for the IRS to issue a new garnishment. They can’t garnish your wages at a job you don’t have. Of course, it’s your job that gives you any income at all, so this again, is not a choice I recommend.
File for bankruptcy. Much like the suggestion above, this is a last ditch effort that really is only dependent on dire situations. Most of the time, payment arrangements can be worked out that can benefit both you and the IRS. Bankruptcy can be damaging to your credit history and cause additional problems if not well thought out. Again, speak with a tax professional before deciding if this option is best for you.
If you don’t pay your taxes, the IRS will indeed come for you. It’s not a matter of if, but when. And, when they do, it’s best to know your options ahead of time so you can take action as soon as possible.