Tax relief encompasses various programs and measures that help reduce the amount of taxes owed by individuals or businesses. Tax relief can take many forms, including credits, deductions, deferrals, or structured payment arrangements that allow taxpayers to manage their tax burden more easily.
Common forms of tax relief include:
- Tax credits: These directly reduce the amount of taxes owed, such as the Earned Income Tax Credit (EITC) or the Child Tax Credit.
- Tax deductions: These lower taxable income, reducing the overall tax liability, such as deductions for mortgage interest or charitable contributions.
- Installment Agreements: Taxpayers who cannot pay their full tax debt upfront can arrange to pay over time through an IRS-approved payment plan.
- Offer in Compromise (OIC): Eligible taxpayers may settle their tax debt for less than the full amount owed if they can demonstrate an inability to pay.
In addition to these relief options, taxpayers may qualify for temporary relief during financial hardship, such as Currently Not Collectible (CNC) status or penalty abatement.
Tax relief is especially valuable for taxpayers facing financial difficulties or struggling to meet their tax obligations. Understanding the available options and working with a tax professional can help taxpayers navigate complex IRS programs and find the best resolution for their situation.