Behind On Your Taxes? 3 Steps You Can Take To Avoid A Tax Lien

If you've fallen behind on your taxes and the IRS is breathing down your neck, you may be looking at a tax lien. Unfortunately, once you have a tax lien, you have to wait for it to come off your credit report. Not only that, but any refunds you're owed while the lien is in place will be withheld from you until the debt is satisfied. If you're facing a tax lien, the best thing you can do is work to avoid it altogether. While the process can be difficult, it's not impossible. However, you need to take a proactive approach as soon as you realize you're in trouble. Here are three steps you can take to satisfy your tax bill and avoid a lien.

Pay Your Outstanding Tax Bill in Full

If you owe back taxes and you're facing a tax lien, the first thing you should try to do is pay the debt off in full. Paying your tax bill in full will stop the lien action and bring you back into good standing with the IRS. This is the best possible option if your debt isn't prohibitively high. However, if you can't pay your tax bill in full, you're not out of options.

Pay Your Tax Bill in Monthly Payments

If your tax debt is too much for you to pay off in full, there may still be help available for you. You need to talk to an IRS representative about arranging monthly payments for the debt. In most cases, the IRS will allow you to make affordable monthly payments until the debt is settled. It's important to stay current on the payments though. If you fall behind, you risk an immediate tax lien. It's also important to note that there will be a limit to the amount of time you'll have to pay off your tax debt. The IRS will be able to give you that information.

Hire a Tax Professional to Help

If you're facing the threat of a tax lien and you've hit a brick wall, it's time to hire a tax professional. Don't wait until you've been served with the lien. Once that happens, it's going to be much harder to get you out from under it. Instead, sit down with a tax specialist as soon as you realize you have a problem. They can help you through the process so you avoid the liens.