Being told that your wages are going to be garnished is one of the scariest statements that someone can tell you. It can leave people feeling unarmed and robbed in a sense, as control over their own finances has been taken away from them.
Being told that your wages are going to be garnished is one of the scariest statements that someone can tell you. It can leave people feeling unarmed and robbed in a sense, as control over their own finances has been taken away from them.
So what is wage garnishment and what causes it to occur?
Wage Garnishment occurs when a court order is given to an employer that tells them to withhold a certain amount from an individual’s paycheck so that it can be given to the IRS for taxes owed. Thankfully, Federal Law states that it can take no more than 25% of your disposable income, or the amount that your income exceeds up to 30 times the federal minimum wage, whichever is of lesser value.
So what is a major cause for wage garnishment and how should one handle being in that situation?
Understanding the root cause of any given problem is oftentimes the first step towards reaching a resolution as well as lessening its negative impact. Owing the IRS money is very serious business, and they can unfortunately become quite aggressive with their collection efforts. Having unpaid taxes is one of the top reasons why wage garnishments occur. Unpaid tax debt can certainly cause enough stress on its own, but with the IRS having the power to garnish your wages at any given time, it can make it unbearable for some people.
Before the IRS will follow through with performing a wage garnishment, they will request the payment for a tax liability and will wait for the individual to respond in a timely manner. If the IRS does not hear back from the person, they will send out a final notice of intent to garnish wages 30 days before the wage garnishment begins. This is the individual’s window to take action and contact the IRS immediately. Honestly, the IRS would often rather come to an agreement with the individual, even if it means accepting less money, rather than deal with the hassle of wage garnishment.
If you happen to be an individual who is stuck in this sticky situation and you are worried about a wage garnishment happening to you, please contact us today!
We would love to help ease your mind!