How Much Can The IRS Garnish From Your Paycheck?

How Much Can The IRS Garnish From Your Paycheck?

IRS garnishments can feel like a huge financial burden, especially if you're already struggling to make ends meet. If you're facing an IRS garnishment, you probably have a lot of questions about how it works and how much money the IRS can actually take from your paycheck. Keep reading to get answers to some of the most commonly asked questions about IRS garnishments.

How Much Can The IRS Garnish From Your Paycheck?

Did you know that if you have unpaid debts, your creditor can legally request that your employer withhold money from your earnings to repay what you owe? This is called wage garnishment. If your wages are being garnished, it's likely because you were already having debt payment difficulties. For example, if there's a judgment against you.

In this case, your employer would take money out of each of your paychecks until the debt is repaid in full. Another instance where wage garnishment might occur is If you owe the IRS taxes and have not paid them, you may have a tax lien.; they are allowed by law to recoup these funds through mandatory payroll deductions.

How Much Of Your Wages Are At Risk?

How Much Of Your Wages Are At Risk?

If the IRS proceeds with your wage garnishment, your employer is legally required to send a certain percentage of your wages to the agency until your tax bill is paid in full. The IRS has more power over wage garnishments than other types of creditors, which means it can leave you with very little money each week to live on.

For example, in 2022 if a single parent who is head of household files taxes and has two children, they could be left with only $542.32 per week. So, if you make $1,000 a week before taxes, the government would take $457.68 of it--and if you earn $2,000 per week pre-taxes then the garnishment amount could reach up to $1,457.68 from your wages each month. Although this varies depending on how much money you owe in taxes.

What Are IRS Procedures Before Garnishment?

Generally, after the IRS assesses your taxes, you will receive notice of the amount due along with a demand for payment. If you don't pay this invoice, at some point afterward you will get a final notice of intent to levy as well as a notice of right to a hearing.

The IRS will begin to garnish your wages if you do not send them the last two documents at least 30 days before. If you cannot pay in full, try contacting the IRS and asking to be put on a payment plan.

What Are IRS Procedures Before Garnishment?

How To Stop Wage Garnishments?

The only way to prevent the IRS from garnishing your wages for an outstanding tax debt is to have the lien released. Your best course of action will depend on individual circumstances. If you're unsure about what to do, get in touch with a qualified tax attorney for guidance on which path may work better given your unique situation.

Challenge the Tax Assessment

If you don't file a tax return, the IRS will create one on your behalf called a substitute. A potential consequence of this method is that your deductions and credits could be overlooked, which would result in you owing more than you actually do. You shouldn't have to face wage garnishment or other penalties if the information used by the IRS is wrong.

If you disagree with their findings, you can contact either the US tax Court or the IRS office for appeals to discuss your options and sort out this discrepancy

Pay Off Your Tax Debt

If you pay off your tax debt, the IRS will automatically release your tax lien. After the IRS issues a release, your employer may take a few days to accept it and stop garnishing your wages.

Immediate Economic Hardship

If the IRS imposes a levy on your wages and it is causing you severe financial difficulty, they may release the levy. According to the IRS, "economic hardship" means not being able to afford "basic, reasonable living expenses."

Installment Agreement

The IRS may agree to an individualized payment plan in order to remove the tax lien, as long as regular payments are made against the debt. A payment plan requires that the taxpayer pay off their full tax debt including penalties and interest.

Offer in Compromise

The best way to prevent the IRS from taking your money is by having the tax lien released. Your next steps depend on your personal financial situation. If you're unsure of what to do, consider speaking with a qualified tax attorney for help deciding which course of action is right for you and your loved ones.

Is It Possible To Appeal For The IRS Garnishment?

If you don't agree with the final notices, you can file for an appeals conference within 30 days. This process is called a Collections Due Process (CDP) hearing.

Nonetheless, you should understand that this is not the right place to argue over the amount of taxes you owe. The appeal manages other problems connected to the garnishment- such as if Procedures were violated by IRS. As a rule, before the Final Notice of Intent Levy was sent out by IRS, you would have already had a chance to dispute taxes owed previously.

Are You Facing Wage Garnishment From The IRS? We're Here To Help!

Ideal Tax Solutions can help you if you're facing wage garnishment from the IRS. Our tax professionals are experienced in helping taxpayers with a wide variety of IRS issues. We can help you negotiate payment plans, challenge assessments, apply for an Offer in Compromise, or file for an appeals conference if necessary.

Get in touch with us today to learn more about how we can help you resolve your tax issue and get back on track. We're here to help you resolve your tax issue quickly and efficiently, so you can get back to your life. Contact us today to get started. Ideal Tax Solutions provides quality representation at a fair price. Let us help you with your IRS wage garnishment today!