As a Maryland tax resolution attorney, I feel it is my duty to inform the taxpaying community about some of the basic taxing rules and principles. One very important concept that many taxpayers who have repayment programs don’t understand is how to not default. This is very important because the costs associated with defaulting a plan are high.
What can happen if I default my plan?
- Total amount come due
- Higher fees to enter into new program
- Terms for next program may not be as favorable
- Possible additional fees and penalties
What steps can I take to prevent from defaulting?
- If you are W2 employee, make sure you are withholding the appropriate amount
- If you are a business, make sure you are paying estimated payments
- Send all payments ahead of time and make sure you receive tracking information
- Notify IRS and/or State of any address change to ensure receipt of mail
- Never send less than the amount you are required to pay
- Mark checks or payments appropriately