What Is Tax Relief in 2024?

Tax relief includes programs and initiatives designed to help taxpayers reduce or settle their tax bills or debts. It applies to both individuals and businesses, and eligibility depends on factors such as status with the Internal Revenue Service (IRS), the amount of debt, and other specifics.

Use this guide to learn about different types of tax relief available and how to access them.

Types of tax relief

Tax relief can come in various forms, such as deductions, credits, and exclusions for those current on their tax payments. If you are behind, options such as repayment plans or reduced settlements might apply.

• Tax relief if you’re up to date on tax payments
• Tax relief if you’re behind on tax payments

Tax relief if you are up to date on tax payments

If your taxes are up to date, you can benefit from deductions, credits, and exclusions, which either reduce your taxable income or lower your actual tax bill.

• Tax deductions: Reduce your taxable income. Examples include deductions for mortgage or student loan interest, property taxes, charitable donations, and business expenses. In 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly.
• Tax credits: Reduce your actual tax bill. For example, the Child Tax Credit is $2,000 per child for 2023 and 2024. A $10,000 tax bill would be reduced to $8,000 after the credit.
• Tax exclusions: Certain income types can be excluded from taxable income. Examples include employer-provided health insurance, some foreign income, and disability payments.

For more detailed information on these benefits, visit the IRS website.

Our expert’s take on overlooked tax deductions & credits

Eric Kirste

CFP®

Often-overlooked tax deductions and credits include: 1. Retirement contributions to tax advantaged retirement accounts—for example, IRA and 401(k). 2. If you own a home and itemize, consider the mortgage interest deduction. In addition, it’s also possible to deduct refinancing points. 3. You might be able to deduct other aspects of your home ownership costs, including property taxes. 4. Health savings account (HSA) contributions are tax-deductible. Not only does the money grow tax-free when you use it for qualified healthcare costs, but you can use your contributions to reduce your tax liability. 5. No matter your tax deduction, be sure to properly document your situation. Keep receipts to back you up. Before you take a deduction, make sure you can prove that you are entitled to it, and consider consulting a tax professional about your eligibility.

Tax relief if you are behind on payments

If you owe back taxes, options include repayment plans or settling debts for less than owed.

Fresh Start Program

The IRS Fresh Start Program offers the ability to settle tax debt for less than the full amount. This program requires filing an offer in compromise considering your income, assets, and expenses. It’s challenging to qualify, and hiring a tax relief company might improve your chances.

---

Tip

Use the IRS offer in compromise pre-qualifier tool to check eligibility.

---

Installment agreements

These allow you to pay off your tax debt over time. Plans range from short-term (under 120 days) to long-term (more than 120 days).

Plan type	Eligibility criteria	Fees
Short-term (<120 days)	Individuals owing $50K or less	$0
Long-term option 1 (>120 days)	Individuals owing $100K or less; Businesses owing $250K or less	$31 – $107
Long-term option 2 (>120 days)	Individuals owing $100K or less; Businesses owing $25K or less; Various payment options	$149 – $225

See more about payment plans on the IRS website.

Our expert on the most important consideration when choosing a payment plan

Eric Kirste

CFP®

The most important consideration when choosing a payment plan is having a budget and getting accepted into a payment plan that works with your budget. These are great opportunities to fix a difficult situation, but they will not do you any good if you cannot afford the payments.

Penalty relief or interest abatement

May reduce or waive penalties and interest if you have a reasonable cause (e.g., natural disaster, family death). Consult the IRS or a tax professional to gauge your chances.

If the prospect of navigating these options on your own is intimidating, consider working with one of our top-rated tax relief companies.

Read More

Do tax relief companies really work?

Should I work with the IRS directly or hire a tax relief firm?

You have two main options: handle your tax relief directly with the IRS or hire a professional tax relief company. Here are the pros and cons of both options.

Pros and cons of working directly with the IRS

Pros

• No costs

• Can be done on your own time

Cons

• The process can be complicated and confusing

• Mistakes could be expensive

• Could lessen your chance of success due to inexperience

Pros and cons of hiring a tax relief company

Pros

• Professional guidance

• Less work on your part

• Potentially better chance at success

• More experience

Cons

• Risk of scams

• Added costs

• No guarantee of relief

For reputable assistance, refer to the FTC guidelines on tax relief scams to avoid potential fraud. Our guide to the best tax relief companies can help.

Read More

9 tax relief scams to avoid

Consequences of not paying your tax debts

Failure to pay taxes can result in serious penalties, including wage garnishments, property liens, and even the revocation of your driver’s license or passport. Interest charges and penalties will also continue to accrue, adding to your overall debt.

Read More

Does IRS debt go away?

Our expert: Prioritize repaying IRS tax debt

Eric Kirste

CFP®

The IRS is considered a super-creditor because the law includes provisions that enable the IRS to collect unpaid tax debts in situations where non-IRS creditors couldn’t. Failing to pay your taxes can be challenging. I recommend taking care of it as soon as possible because the IRS has more power to collect your debts. The IRS can force you to pay using several tools, including federal tax liens, levies, and wage garnishments. And that’s on top of penalties and interest that will pile up.

Recap of your tax relief options

Here’s a summary of your options if you’re seeking tax relief:

Relief	How it helps	Who can help
Tax deductions	Lowers taxable income	Your tax preparer
Tax credits	Lowers the actual tax bill	Your tax preparer
Tax exclusions	Excludes a portion of income from taxation	Your tax preparer
Fresh Start Program	Settles tax debt for less than you owe	IRS or tax relief company
Installment agreements	Allows gradual repayment of tax debts	IRS or tax relief company
Penalty relief & interest abatement	Reduces or waives fees and interest costs	IRS or tax relief company

Read More

How much does tax relief cost?, How to get help paying your back taxes, How to settle tax debt with the IRS, How to get out of tax debt