Don’t Let a Wage Garnishment Control Your Life!

I have decided to take a break the next two weeks from the tax plan blogs, because of an email I recently received. Unfortunately, I get many emails similar to this. In the email, the fellow stated that he felt all hope was lost. His tax professional had told him there was nothing that could be done about his situation. He felt that the only option left open to him was to take his own life. The IRS really can ruin your life, but only if you let it! Do not give up! Do not let the IRS win!

If you owe more than $10,000 to the IRS and you haven’t made an agreement with them to pay it off, you are vulnerable to a wage garnishment. If you have been fortunate enough to avoid it so far, take heed now before it’s too late! The most efficient collection method and pressure tactic the IRS pulls out of its bag of tricks is the wage garnishment. It is incredibly easy for them to figure out where a taxpayer works, since your employer is reporting money paid to you on a quarterly basis. It's not as easy for the IRS to levy contractors, but a 1099 wage garnishment is much harsher.

Here is what you can expect if a wage garnishment hits you!
• Your employer or the people you contract for will be notified before you.
• What you are left with is based on an IRS table of what you will need for basic survival.
• You could be left with as little as $791 a month.
• If you work on a 1099 basis, your entire check will be taken.
• If you have more than one job, all of your jobs can be levied simultaneously.
• Working overtime will give you absolutely no extra income.
• Many employers choose to fire an employee with a wage garnishment.
• Your spouse may go through a wage garnishment at the same time.

There are many ways to temporarily end a wage garnishment. You can prove extreme hardship and have it lowered. You can file for an Offer in Compromise or appeal your tax debt. However, these are temporary solutions at best. At worst, they could potentially cause even more tax problems.
Your best bet to stop a wage garnishment is to enter into an Installment Agreement. This will show the IRS that you are willing to work with them to pay your tax debt, and will fully protect you from aggressive action as long as you abide by the terms of your Installment Agreement.

Not all Installment Agreements are created equal.
There are different kinds of Installment Agreements for different situations. You need to make sure that you are in the one that benefits you the most! If you cannot pay the amount you agreed to in full and on time every month, you could be looking at another wage garnishment. It is really best for anyone who owes more than $10,000 to talk to a tax debt professional before agreeing to anything with the IRS.

The holiday season is beginning. Will you have the money for a turkey dinner and holiday presents? My team is here to make sure that you can live a happy life, free from the worries of a possible wage garnishment or bank levy. Don’t give up! Don’t let the IRS win! Let us help you!

The Rick Perry Tax Plan

Rick Perry has been viewed by many Republicans as the best candidate for the job as president. In fact, he was once the front runner in the Republican primaries. As each debate passes, he falls farther behind in the polls. However, the Republican primaries are far from over, and it is never too late for things to turn around for this candidate. So, it is important to take a look at what his ideal tax plan would be for America.


What does Rick Perry want?

Perry wants to create a hybrid of a flat tax plan and our current tax structure. In his tax plan, taxpayers would make a choice between using one or the other. He wants to completely eliminate taxes on investment income. He would also allow deductions for mortgage interest, charitable contributions, and state and local taxes on the flat tax plan.

The flat tax plan would tax all who selected it 20% of their personal and corporate taxes. For those who make over $1 million annually, this would be a tremendous $510,000 tax break. For those who make between $40-50 thousand annually this flat tax plan would slightly raise taxes. Those making less would definitely expect a dramatic increase in taxes.

Experts believe that any wealthy citizen in his right mind would choose the flat tax plan over what our current system is taxing them. For the rest of America, there would be no benefit at all to the tax plan. Tax season would simply be business as usual for them.

Will Perry’s tax plan hold up?

Perry’s tax plan would bring a revenue shortfall in 2015 of nearly $1 trillion. The current Bush-era tax breaks would only cost America $570 billion. So, America’s deficit could potentially double, unless the government dramatically cut back on Federal programs. This is why Perry wants to cut Federal spending to 18% of GDP, which is $15 trillion. This would drop spending from $3.6 trillion to $2.7 trillion a year.

Just what does Rick Perry want to cut in his tax plan? Well, he’s become rather infamous for not being able to remember three item list of major Federal agencies (the last one he actually wanted to cut was the Department of Energy, not the EPA). So, at best, Perry’s tax plan seems like an enthusiastic yet poorly thought out project. It relies on the fickle and unproven Trickle Down Theory to create jobs and economic growth, while doubling the rate America’s debt grows.

The Mitt Romney Tax Plan

Mitt Romney has been maintaining a steady second place in the Republican Primaries, despite his vacillating stance on most issues. His tax plan is very much an example of this flip-flopping. Being a Republican, he is very much for bigger tax cuts and lower deficits. Yet, he can’t seem to make a firm stance on what it would take to make these competing objectives work together.

What tax cuts does Mitt Romney want?
Every Republican candidate has a laundry list of what taxes they would like to cut, if they were given the power. While Mitt Romney seems content with simply extending Bush Era tax cuts and maintaining marginal rates at current levels, he does have his own catalog of tax cuts as well. His tax plan would:

- Eliminate capital gains tax and estate tax.

- Further reduce taxes on savings and investment.

- Eliminate the death tax (estate tax).

- Lower the corporate income tax rate to 25% (currently 35%).

- Eliminate capital gains tax for those who earn less than $200,000 a year.

His tax plan also includes a “territorial” tax system. This means that any money you make from outside of the United States would not be taxed. Corporations that do a lot of business in other countries wouldn’t have to pay a penny of taxes on what they earned with this tax plan.

While he no longer opposes the idea of a flat tax, he still hasn’t met a flat tax plan that he feels would actually work. His current wish-washy position on this is that he just wants a tax plan that wouldn’t raise taxes on the middle class. If he ever finds a flat tax plan that would be middle class friendly, he would probably support it.

Would Mitt Romney lower the deficit?
In short, Mitt Romney wants to cut Federal programs and 10% of the government’s payroll. He feels that government employees are overpaid in comparison with the rest of the country. He also feels that Federal spending should be cut from programs like Amtrak and the National Endowment for the Arts. His tax plan calls for a $500 billion cut to federal programs. He contends that he likes these programs, but feels they are unessential. And, in his words he doesn’t want to “borrow $1 billion from China to pay for them.”

But, will these cuts in spending be enough to lower our deficit with all of the tax cuts that Romney would push for? Maybe not, but so far he seems to be the only Republican candidate truly concerned about not making our deficit worse.