Monthly Archives: June 2015

Tips For Reducing Your IRS Debts In 2015

Are you one of the estimated 8.2 million Americans who owe the IRS? If you have extenuating circumstances that are preventing you from paying your taxes on time, instead of just being a criminal and deciding to not pay what you Uncle Sam, you could be eligible for relief. Here are some IRS debt relief measures that you can take:

Reduce your debt
The IRS will allow for reduced debt and a repayment plan if you cannot repay your debt in full within 6 years. You will need to visit the IRS website at and download IRS form 656B. Once you full out this form in full, specifically form 433A, you will then know the minimum amount that the IRS will require you to payback. You will need to file both forms by mailing them to the IRS. They will require you to pay a portion of this bill upfront, as well as a $150 dollar application fee. The good news is that the IRS will apply this $150 to your debt balance if they accept your repayment proposal. The IRS will often accept these terms if they are reasonable. Pro-tip make the minimum you will offer the IRS at least 5% more than the minimum they will accept, this will help to ensure acceptance of your proposal. This will effectively allow you repay less than what is owed, it is the government version of a settlement. Often times the IRS will take a settlement, as getting something is better than getting nothing.

Erase Your Late Fees

If you like 10.4 million other Americans were late on filing your tax returns by the deadline, you are nto alone. You could however be on the hook for a 4.5 percent per month on the balance owed, plus a penalty interest of 3.19 percent. Yet if you have missed this deadline for a valid reason you can get forgiveness of these late fees and penalty interest rates. Good reasons include the death of a spouse or family member, divorce, illness, or any natural disaster. You simply need to alert the IRS to this situation, it is as easy as that. To remedy this problem you simply need to send the IRS via certified mail a detailed letter stating why you have reasonable cause to have failed to file on a timely manner. You then should request an abatement of the late filing and late payment penalty interest. All you need to do in this letter is to explain what hardships you faced and how it impacted you with the filing of your taxes by the deadline. Despite popular belief the IRS can be quite understanding, you just need to follow proper procedures and state your case.

Pay Your Bill Over Time

If for whatever reason you cannot pay for the entire balance that you owe the IRS by the deadline, you can always attempt to enter into a payment arrangement with the IRS. This is known as an installment agreement, and it is fairly easy to set up with the IRS. You will however be in the hook for interest of 3.19 percent, as well as a $105 dollar fee. You simply file your taxes as normal, sending in as much money as you can, then navigate to and fill out the online application to set up your repayment plan. The IRS will determine your payment amounts, based largely on how much you owe, coupled with your ability to repay the debt within 6 years.

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Struggling With Debt This Summer Consider A Balance Transfer Credit Card

If you have racked up some credit card debt, carrying a balance that you cannot pay off in 3o days, you will face paying interest. There is one way to avoid this interest and give you a chance to catch up on paying off the balance. This will involve applying for and receiving a balance transfer credit card. These cards can not only lower your credit card interest, many of them come with an introductory period of no interest. There is one catch with many of these cards, a balance transfer fee, which usually amounts to 3% of the amount transferred. While this could be a large fee depending on how much debt needs to be transferred, it is offset by the lower interest rate or the interest free introductory period. You should avoid any balance transfer credit card offer that charges a balance transfer fee higher than 3% as this is not a competitive rate. There are a few rare offers of a zero percent balance transfer fee, these are the best deals, although they are rare and require excellent credit to obtain.

When selecting the perfect balance transfer card you want to look for one with an introductory interest free period. Ideally you want one with an intro period that has a long duration to give you the maximum amount of time possible to pay off your old credit card debt. I should point out that the interest free introductory period assumes that you will pay off the entire debt by the end of the introductory period. Failure to pay off the entire balance before the end of the introductory period will result in being charged interest retroactively from the date you made the balance transfer, often at very high interest rates. Given this information you should only apply for and use a balance transfer credit card if you can be reasonably assured that you can pay off the entire balance before the end of the introductory period, or else you could end up with a far larger debt then the one you previously had.

You should also try and make the most out of the new credit card. When selecting your balance transfer card, look for features like no annual fee, no foreign transaction fees and the lowest possible interest rate. Some cards even offer benefits such as travel insurance and purchase protection policies.

You should only apply for 2 or more of these cards only if the credit limit was not high enough on your first issued balance transfer card. If you are facing high interest on your primary credit card, and the credit limit is not high enough to transfer the full debt to the new one, seeking out a 2nd balance transfer credit card may indeed be your best option. You will run the risk of being denied credit, but it is worth taking the risk if you are being buried in credit card debt.

Below is our top pick balance transfer credit card:

Citi Simplicity® Card

This card offers an amazing 21 month 0% interest introductory balance transfer offer. This card will give you 21 months to get that debt paid off. The only catch with this card is that you need excellent credit to obtain it. The interest ranges from 12.99% -22.99%, depending on your credit score. It does have a balance transfer fee of 3% of the total amount transferred, but this is still a deal given the 21 months 0% intro APR on balance transfers and purchases. There is also NEVER late fees ever with this credit card. You can also sign up for automatic alerts by email or phone for things such as balance levels or when payments are due. All around this is a solid credit card that can help you to get out of debt.

For more money saving tips, advice on reducing debts and saving money in 2015, stay tuned to the finance team from