Tax day has come and gone for 2013. Some are looking forward to receiving their tax refunds while others are feeling the pain of writing a check to Uncle Sam. Either way, the old saying about death and taxes remains true: taxes cannot be avoided. For those paying back taxes through wage garnishment, discharging non-tax debts by filing for bankruptcy may make it easier to make those tax payments.
In honor of this week’s April 15 deadline, here are a few reasons to hate tax day. First, for middle class Americans it is disturbing that some large corporations enjoy a lower tax rate than they do. In fact, some corporations can boast that they pay no federal income tax while the average middle class American has a tax rate of over 25 percent. Second, TurboTax maker Intuit has lobbied hard to ensure that Americans keep paying to file their income taxes versus other nations that allow citizens to file their taxes for free. Finally, the average small businesses owner spends over 100 hours preparing federal taxes. These hours must be spent because of the many variations in the current tax code.
For those paying taxes through wage garnishment tax day is even more dreaded. Although back taxes are generally not dischargeable in bankruptcy, if wage garnishments affect a payor’s ability to pay other bills, a Chapter 13 bankruptcy may help regain financial stability. Through bankruptcy, manageable payments can be calculated so that creditor harassment can cease.
The first step to bankruptcy begins with an assessment from a credible bankruptcy attorney. Once financial obligations have been fulfilled, all remaining debt will be discharged in the bankruptcy.
Source: Huffington Post, “11 Totally Legitimate Reasons To Hate Taxes,” April 15, 2013