Tax Debt Lawyer Hartford, CT
Tax Debt Lawyer Hartford, CT
Each year, following the holidays, many Connecticut residents turn their focus to their tax returns. For the majority of us, reducing the amount of tax debt we owe becomes our priority. The best time to begin thinking about how to reduce your tax debt should be before the year ends. Although it is often a year-long process, there are last-minute steps you can take to help reduce the year’s tax obligation.
A Hartford, CT tax debt lawyer from The Law Offices of Ronald I. Chorches can help you reduce how much you owe on your taxes. We are more than happy to meet with you to discuss your individual situation. In the meantime, the following are some steps you can take to help reduce your debt.
Defer Certain Income
The more you earn, the higher your tax bracket becomes. This means you could end up owing more taxes. To help lower your tax debt, consider deferring avenues of your income, including commissions, bonuses, or other types of earnings until after January 1st.
Make the Maximum Contributions Allowed to Your Retirement Accounts
If you have not hit your pre-tax limit for contributions to your 401(k) account, making deposits before the year ends can help reduce your taxable income. Another advantage is that it can boost your retirement account balance if your employer offers matching funds program.
Consider Flexible Spending Accounts
If your employer offers flexible spending accounts for childcare or medical expenses, you could still be able to take advantage of these accounts and making pre-tax contributions. However, make sure to check with your employer to see if balances can be rolled into the next year if you will not be able to spend these funds quickly.
Sell Off Any Low-Yield Investments
If you have any shocks or shares that are not doing well, selling them off before the year ends could help offset any capital gains taxes for those investments you have that are performing better. This is referred to as “loss harvesting” and could help reduce the amount of your final tax debt.
A tax debt lawyer in Hartford, CT knows that another issue in tax debt is when a client owes any prior year taxes. This type of tax debt can also involve interest, penalties, liens, or levies on any property the client owes.
A Hartford, CT tax debt lawyer can help you work with the IRS to implement the one or more of the following options:
- Working out an installment agreement that will allow the client to make monthly payments on the past due amount owed.
- Working out a compromise that allows the client to settle their debt for less than what they owe.
- Working out a temporarily delayed payment debt in the event the client has experienced a financial hardship that limits or prevents their ability to pay their tax debt.
Unpaid Property Taxes
Many people have a time or two during their lives where they run into financial troubles. This can be due to a number of issues including job loss or medical issues. It is not uncommon in these situations for a homeowner to fall behind in their mortgage payments. When this happens, they have probably also fallen behind in their property tax obligations, as well. If you find yourself in this situation, a tax debt lawyer in Hartford, CT can help.
Mortgage and Property Taxes
Property taxes can be paid one of two ways. Either the homeowner pays the municipality directly or the property tax obligation is included in their monthly mortgage payments. When the homeowner pays the municipality directly, it is much easier to work out a payment plan because the process of a foreclosure on the property by the municipality can take several years. During this time period, the homeowner has multiple options to get caught up with the taxes, including filing for Chapter 7 bankruptcy. By discharging other debt, there will be more funds available for the homeowner to now get caught up with their property taxes.
The above scenario will likely only work if the homeowner owns their property outright. Homeowners how have a mortgage on the property are under much more pressure to get caught up. This is because the bank or mortgage company can begin the foreclosure process if the homeowner does not stay current with their property taxes and this foreclosure process happens much more quickly than if it is a municipality who is foreclosing for nonpayment of property taxes. The bank can do this even if the homeowner is current with their mortgage.
A Hartford, CT tax debt lawyer knows that in these situations, filing for Chapter 13 bankruptcy is the much better option. Chapter 13 sets up a payment plan to allow the filer to get caught up on their debt. This repayment plan can give the filer the opportunity to get caught up on their debt – including missed mortgage payments and back property taxes – while stopping the high interest rate that delinquent debt often brings.
The repayment plan in a Chapter 13 bankruptcy is usually three to five years. As long as you adhere to the approved repayment plan, your home is protected from foreclosure or any other collection activity for back property taxes. It is critical to realize, however, if you miss payments and fall behind on your repayment plan, you could lose foreclosure protection.
Chapter 13 can help protect your home from other legal actions, as well. If there are any liens that have been put on your home – such as a second mortgage, judgments, or other reasons – talk to a tax debt lawyer in Hartford, CT to see how if Chapter 13 bankruptcy is an option for your situation.
Let a Hartford, CT Tax Debt Lawyer Help
If you are facing issues with tax debt and don’t know where to turn, the legal team at The Law Offices of Ronald I. Chorches can help. Call our office today to meet with a tax debt lawyer Hartford, CT clients trust.