Latest news with #wagegarnishment
CBS News
29-05-2025
- Business
- CBS News
Tax questions to ask if you still haven't filed your 2024 return
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. There are a few important questions you should ask before filing your late tax return. Getty Images/iStockphoto The 2024 tax filing deadline may have come and gone, but that doesn't mean your chance to file has disappeared with it. A significant number of Americans miss the tax deadline every year, some unintentionally and some for reasons tied to financial hardship, personal emergencies or confusion around what they owe. And while missing the tax deadline can feel like a major issue, the worst thing you can do once that April 15 deadline has passed is nothing. Failing to file your taxes could lead to a cascade of problems, including penalties, interest and in some cases, collection actions, like wage garnishment, tax levies and other serious consequences, by the Internal Revenue Service (IRS). But those hefty consequences aren't necessarily set in stone. There are still ways to reduce the damage, and potentially avoid some of it altogether, especially if you act quickly and get the right help. That starts with asking the right questions, whether you're preparing to file your 2024 taxes after the deadline, either on your own or while working with a tax relief expert. Explore your tax relief options and chat with an expert now. Tax questions to ask if you still haven't filed your 2024 return If you haven't filed your 2024 tax return yet, here are the most important things to ask now: Did I file an extension, and what does that extension cover? Many people assume that filing a tax extension gives them more time to do everything, but that's not exactly true. If you filed for a tax extension by the April 15 deadline, that gave you until October 15 to submit your return. But there's a big catch: the extension applies only to the paperwork, not the payment. If you owe money and didn't pay anything by April, the IRS has already started charging interest and may have added late payment penalties. If you're unsure whether you filed an extension, now's the time to find out. Check with your tax preparer or log in to your IRS account at If you didn't file an extension at all, then you're likely facing a failure-to-file penalty, which is 5% of your unpaid taxes per month, up to a maximum of 25%. Filing your return as soon as possible, even if you can't pay yet, will stop that more serious penalty from increasing further. Chat with a tax relief specialist about the strategies available to you today. How much do I owe, and what happens if I can't afford to pay it right now? If the fear of a tax bill is what's kept you from filing, that's understandable. But the IRS is often more flexible than people expect, as long as you file. Once your return is in, you can apply for a payment plan, which can break your balance into smaller monthly amounts. If you're facing financial hardship, you may qualify for Currently Not Collectible status (a temporary pause on collections) or even an Offer in Compromise, which allows you to settle your tax debt for less than you owe. That said, you must file first. The IRS won't negotiate with you until they have a return on file and a clear picture of your tax liability. Have I received all the documents I need to file accurately? A common reason people delay filing is that they're missing forms, like a W-2 from an old employer or a 1099 from a side gig. But by late spring, you've likely exhausted the waiting game. Fortunately, there's a fix. You can log in to your IRS online account and pull a wage and income transcript. This will show most of the tax forms the IRS has on file for you. That makes it easier to file accurately and avoid underreporting income, which is a common mistake that can trigger audits and penalties down the line. It's also a good reminder that even if you don't have the form, the IRS probably does. Am I at risk of IRS penalties or enforcement action? The longer you wait to file and pay, the more you'll owe thanks to late penalties and daily compounding interest. The failure-to-file penalty is one of the harshest: 5% of your unpaid tax bill per month. That adds up quickly. The failure-to-pay penalty is less severe (0.5% per month), but it still increases the amount you owe over time. It's not necessarily too late to request penalty relief, though. The IRS offers first-time penalty abatement if you've been compliant in past years. You may also be eligible for reasonable cause relief if you've experienced illness, financial hardship or other extenuating circumstances. Would working with a tax professional make this easier or cheaper in the long run? Late filings can be tricky. If you're unsure about how to handle the penalties, tax debt or just need help navigating the process, it might be worth hiring a tax relief expert to help. They can assess your eligibility for penalty abatement, installment agreements or other IRS programs designed for people in exactly your position. Plus, if your taxes are more complex — for example, if you're self-employed or have multiple income streams — getting professional help could reduce the chance of errors that cost you even more later. The bottom line If you still haven't filed your 2024 taxes, now is the time to stop avoiding it and start asking questions. Whether you're missing forms, worried about what you owe or are just unsure how to fix it, you have more options than you think, as long as you act now. Filing, even late, opens the door to payment plans, penalty relief and a clean slate moving forward.
CBS News
27-05-2025
- Business
- CBS News
Can tax relief stop wage garnishment?
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. If your wages are being garnished by the IRS (or if you're at risk of it), there are a few strategies you can use to deal with the issue. Getty Images/iStockphoto Having your wages garnished over an unpaid debt is one of the more stressful financial consequences you can face. One day, you're making ends meet between your paycheck and your regular bills, and the next, a chunk of your income has been taken to pay a delinquent debt, with the money gone before you ever see it. This type of financial penalty can have a big impact on your financial health, as it can be tough — or in some cases, impossible — to find room in your budget for all of your expenses when a portion of your pay has been taken to pay off an outstanding debt. And while wage garnishment may seem like a penalty that's reserved for the most serious debt-related issues, it's a real threat for anyone who has fallen behind on their taxes. After all, the Internal Revenue Service (IRS) has the option to use wage garnishment (and many other tools) to try and collect what's owed. But unlike debt collectors, the IRS doesn't need a court order to start garnishing your wages. Once they've sent you several collection notices and no resolution has been made, they can legally instruct your employer to withhold a portion of your paycheck. For those who are already struggling to make ends meet, this kind of penalty can make it feel nearly impossible to keep up with their expenses. That's part of why the idea of tax relief sparks so much interest. But when you're facing something as aggressive as wage garnishment, you may wonder if tax relief can help get things back on track. So can tax relief stop wage garnishment, or do you need to consider other options? Chat with a tax relief expert about your options today. Can tax relief stop wage garnishment? Yes, tax relief can stop IRS wage garnishment, as these strategies are designed to help taxpayers resolve their unpaid debt and halt enforced collections like garnishment. However, you'll need to act quickly and choose the right strategy. Here are some of the most effective tax relief methods to use when you're facing wage garnishment: An installment agreement : In many cases, setting up a payment plan : In many cases, An Offer in Compromise : If you're approved for an Offer in Compromise, this option allows you to settle your tax debt for less than you owe : If you're approved for an Offer in Compromise, this option allows you to Currently Not Collectible status : If you can prove financial hardship, the IRS may temporarily halt collections, including wage garnishment. While the debt still exists, you won't face enforcement while protected under this status. : If you can prove financial hardship, the IRS may temporarily halt collections, including wage garnishment. While the debt still exists, you won't face enforcement while protected under this status. Innocent spouse relief: If your tax debt resulted from your spouse's (or ex-spouse's) actions, you might be eligible for this form of relief. Approval could eliminate your responsibility for the debt and stop related garnishments. These relief options typically require detailed financial disclosures and can take time to process. That's why many people turn to tax relief professionals, like enrolled agents or tax attorneys, who can negotiate with the IRS on their behalf and request a garnishment release while a resolution is underway. Find out how to get rid of your delinquent IRS tax debt now. What to do if the IRS is garnishing your wages now If your wages are already being garnished by the IRS, don't wait to deal with the issue. Immediate action is your best shot at stopping or reducing the levy. To start, verify how much you owe and review the notices the IRS has sent. If you haven't received a Final Notice of Intent to Levy and your right to a hearing, the IRS may have skipped a required step, something a tax professional can help you identify and challenge. From there, you should get in touch with the IRS or work with a tax relief specialist to begin negotiating a resolution. In many cases, you can request a release of garnishment by proposing an installment agreement or proving hardship. While the IRS doesn't have to agree right away, showing good faith effort often helps your case. If you're truly in financial distress, be ready to document everything: your income, expenses and assets. The IRS wants proof that garnishment is creating undue hardship before they'll consider lifting it. It's also worth noting that the IRS typically won't garnish wages while a request for an Offer in Compromise or Currently Not Collectible status is pending. So even applying for relief could buy you time while a longer-term solution is evaluated. The bottom line Yes, tax relief can stop wage garnishment, but the IRS won't back off unless you take specific steps to resolve the debt or prove that garnishment is causing severe financial harm. That said, the IRS does generally want to help taxpayers who are proactive and cooperative find a solution, especially those who show a genuine intent to pay. So, if your paycheck is being garnished by the IRS or you're on the verge of it, don't ignore the problem. The sooner you act, the more options you'll have, and the better your chances of keeping your income intact. Whether it's setting up a payment plan, filing for hardship status or exploring other forms of relief, taking that first step now could make a significant difference in how long it takes to get your financial life back on track.
CNET
09-05-2025
- Business
- CNET
Student Loan Borrowers, You Have Until Summer to Prevent Your Wages From Being Garnished
If your federal student loans are in default, the Department of Education could begin garnishing your wages soon. Getty Images/Viva Tung/CNET If you're behind on your student loan payments, the Department of Education is about to use your paycheck to get your attention. The Department of Education announced it had resumed involuntary collections on student loans on May 5. That's the same day it began sending defaulted student loan borrowers a 30-day notice that their income tax refund and federal benefits will be withheld, known as the Treasury Offset Program. "Later this summer, all 5.3 million defaulted borrowers will receive a notice from Treasury that their earnings will be subject to administrative wage garnishment," the statement said. Federal student loans enter default after they are 270 days past due. Loan servicers can first report loans that are 90 days past due as delinquent, which can be reported to the credit bureaus and damage your credit score. After the loan enters default, the consequences become more severe: The entire loan balance becomes due immediately, plus additional collection fees. The government can withhold money from your income tax refund (federal and state) and other federal payments, like Social Security benefits. Your loan servicer can order your employer to garnish your wages up to 15%. Experts noted that this does not affect borrowers who are in repayment, including those enrolled in the SAVE plan, but they advise taking action now. "Borrowers in default should act quickly to prevent collection efforts by contacting the department's Default Resolution Group," student loan expert Elaine Rubin said in an email. You can check the status of your federal student loans at or by reaching out to your servicer. If your loans are in bad standing, here are three options you have right now. Read more: Does Student Loan News Have You Scared? I Talked to an Expert to Answer Your Top Questions Direct loan consolidation: Quick relief if you have multiple loans Consolidating your defaulted loan into a direct loan consolidation is the quickest way (besides paying it off) to get out of default. However, there are a few things to consider. First, are you eligible for consolidation? "If you defaulted on a direct consolidated loan, you may need at least one other eligible loan to consolidate," Rubin said. "If you do not have any additional loans, consolidation may not be an option for you." Second, understand that consolidating your loan will stop collection activity, but there are still consequences. "Although consolidation is quicker, it does not remove the default from the borrower's credit history and interest and collection costs may be added to the outstanding loan balance," student loan expert Mark Kantrowitz told CNET in an email. If you choose to consolidate, you'll have the option of entering an income-driven repayment plan or making three consecutive, on-time payments to qualify for consolidation. Rubin said if you enroll in an IDR plan, the process can take up to 90 days. Loan rehabilitation: Takes longer but can help rebuild credit Loan rehabilitation takes longer than consolidation, since you'll need to make nine consecutive on-time payments based on your income. After that, your loan is considered out of default and the default (but not the delinquencies) is removed from your credit report. If you decide to do to a loan rehabilitation before wage garnishment begins, Kantrowitz said you will not have your wages withheld while making payments. "But, if the borrower's loans are already subject to garnishment, the nine out of 10 payments are in addition to the involuntary garnishment payments," he added. Rubin noted that you should still carefully consider your goals before taking action. "If the primary objective is to rebuild credit and eliminate the default record, rehabilitation could be the best option," she said. "On the other hand, if the borrower needs to qualify for additional financial aid in the near future, consolidation might be the more practical choice." Pay off the entire balance: Best, but hardest option If you're already struggling, this is probably not an option. However, the Department of Education said you can avoid collections and negative credit reporting by paying off your debt within 65 days of notification that your loans are in default. You can see your loan balance through your loan servicer's account or by logging into using your federal student aid login and password.
