Help for those who need it…So what kinds of tax credits are there, and how can I get them?

Most tax credits are dependent on your income. The majority of them do require that you be in a lower income bracket, so check with the IRS at irs.gov to see if you can qualify.

Some of the tax credits that you may qualify for are listed below. This is not a complete list, but it should give you an idea of what’s okay and what isn’t:

Child tax credit: You can receive a $1,000 tax credit for each child that is eligible as dependents. Be careful with this one, as claiming a child incorrectly can cause you to be in debt to the IRS.

Education credit: This is available to full and part time students. So whether you’re a twenty-something going full time or if you’re a returning student looking to improve your career options you can claim your schooling. You can claim up to $1,650 as a credit for your schooling for the year. Usually your school will send you a tax statement.

Home Energy Efficiency Credit: If you’ve made changes to your home to make it more energy efficient you can claim up to $500 as a credit. Keep your receipts so you can prove you made the improvements. Not only do you save on utility bills, but you get back money for the government.

Be certain…Tax credits can provide you with a much needed shot in the arm as they can greatly increase your income tax return. But beware, and make sure you know and follow the guidelines set by the IRS before you claim anything as a credit.

These same credits can backfire on you as the IRS frequently audits larger tax returns. You could find yourself owing the IRS if you incorrectly claimed a tax credit, or claimed something you shouldn’t have.

If you’re not sure about a tax credit feel free to drop your friendly former IRS-Hitman an e-mail.

Now you have the smoking gun…Use it!

Don’t panic…don’t ignore the debt, and do file the return. You can try to put off the debt by requesting an extension; October 15th is the latest you can put it off. This could give you a chance to come up with the money that you owe by then. But you do have to file, and the longer you wait the harder the debt will be to deal with.

Depending on how much you owe, you can try to deal with the IRS on your own, or you can seek professional tax help. The first thing you need to do however is to jump on the problem immediately! Do not wait.

Can I bury my head in the sand? I recommend against this. What happens if you wait? First of all the IRS starts sending you letters telling you how much you owe, and asks that you contact them to setup arrangements. If you don’t respond to the IRS then…well, things can get real bad real fast for you. The IRS can seize your wages, seize you bank account, or any other accounts you have. They can also put a levy on your home. That’s why taking immediate action is so important.

But wait… There are options available to you. You want to take action, but you have no way to pay the debt in full. Most people can’t pay their IRS debt in full, and usually it’s over $1,000. Not too many people have that kind of money lying around.

• Setup a payment plan with the IRS.

• Apply for an Offer in Compromise. This can reduce your debt to pennies on the dollar. Beware however, this is very difficult to get, and the IRS frequently denies applicants.

• Apply for Currently Not Collectible status. Again this is very difficult as you have to prove to the IRS that you are living at the bare minimum.

Choose wisely…However you choose to deal with your IRS tax debt is up to you. The key is to make a choice, and not to bury your head in the sand. Just because you don’t see an IRS-Hitman doesn’t mean he doesn’t have you in his sights.

Now you have the smoking gun…Use it!