What is a Wage Garnishment?
A common way the IRS takes money from you when you owe taxes is through your wage. A Wage Garnishment is a court-ordered instruction that mandates your Employer to withhold a specific amount of your paycheck and have it sent to your debtors until the liability is paid in full.
Wage garnishment can leave a person with very little money on which to live and is a very real and legal tactic the IRS uses every day. If you already live paycheck to paycheck, then you cannot afford to let this occur. Fortunately, there are options to remove your IRS tax garnishment and maybe even reduce your tax liability.
How Much Money Does the IRS Take?
It is not uncommon for the IRS to take 70% or more of your wages. Unlike many creditors, there is no limit to how much the IRS can garnish from your wages.
Instead, they have an amount calculated for which you are exempt from paying. They have a specific tax-oriented equation they use to determine how much they can take out.
First, they check your previous filing deductions and status (e.g. married filing jointly) to get an estimate on how much you can live off of. Once they figure this out, then they take the rest of your paycheck and apply it to your debtors.
The IRS tables for figuring the amount exempt from levy on wages, salary and other income details the amount left in your paycheck, whether you are paid daily, weekly, biweekly, semimonthly, or monthly. The amount is also dependent upon how many exemptions you claim on your tax return.
There is a separate table for each filing status, including Single, Married Filing Joint Return, Head of Household, and Married Filing Separate.
Based upon these tables, a single person paid monthly with only one exemption will be left with $845.83 from his or her paycheck. Even if this person makes $5,000 per month, he or she will still only be left with this small amount. As another example, a married couple with six exemptions will be left with roughly $3,000 per month. These examples show how little you will be left with on an IRS wage garnishment.
Typically, this will place you in a financial hardship, or make a hardship worse than it already is.
How Can You Stop an IRS Wage Garnishment?
The golden rule in this is: it is easier to prevent then to stop an IRS wage garnishment. If you feel there may be a wage garnishment in the near, it is best to contact the IRS as soon as possible to set up a repayment plan.
However, if you are unlucky enough to receive a Wage Garnishment, you will need an IRS Wage Garnishment Release to stop it. To get this release, you have a number of options:
The most popular of these three is indeed the Offer in Compromise, because of how much money it can really save you.
Simply put, an Offer in Compromise is when the IRS offers you a significantly smaller amount to pay based on your inability to pay your current tax amount.
Sounds great, right? It surely does work for those who get accepted, however, it is extremely hard to obtain.
The eligibility process is rigorous; as you have to prove financial hardship via a job loss, medical bills, or some other catastrophic expense. As well, if approved, you must pay the new offer within the allotted time, or you will have to pay the original amount.
How We Can Help Remove a Tax Garnishment
The tax professionals at TaxRise have experience working with the IRS to remove garnishments. They know the steps you need to take to apply for an IRS tax garnishment removal and will ensure that all the paperwork is handled correctly. Any errors could lead to your application being rejected, or extend the time of the garnishment while new paperwork is filed.
Not only will the experts at TaxRise help you to get the garnishment removed, but they will also provide you with the next steps to take to reduce or remove your tax liability or set up a payment plan to get you back in compliance with the IRS.
For more information call us at 833-419-RISE(7473) and our tax experts can help answer your questions.
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