Many workers barely scrape by after covering rent and utilities each month. There are certain months where an individual may have to make sacrifices on groceries or important car maintenance because of back taxes.
How do you stop wage garnishment?
While federal and state law makes it difficult to resist a wage garnishment, citizens have rights. Therefore, if you are struggling to make ends meet while also settling back taxes, it is time to speak to a professional at Levy & Associates .
What Is Wage Garnishment?
Wage garnishment is a judgment that is ordered by the courts. It’s a method for paying back taxes as the federal government withdraws a percentage from each check a person receives from an employer. Wage garnishment is more common than most believe, as a significant portion of the population pays back taxes this way.
Wage garnishment not only relieves tax debt but also covers past due expenses for child support, consumer debt, and student loans. Furthermore, it is a common punishment handed out to delinquent taxpayers who are subject to a tax levy.
There are two primary types of wage garnishment – wage and non-wage garnishment. In general, most citizens deal with traditional wage garnishment. The form of tax debt repayment is backed by law and legally requires an employer to deduct a portion from each paycheck. The amount that gets deducted depends on the court ruling as well as state law.
What Are Your Rights if Your Wage Is Being Garnished?
It is imperative to remind taxpayers that wage garnishment is a legal ruling. Thus, the federal government or employer cannot begin garnishing your wages for no reason. For example, they must take some type of legal action such as filing a lawsuit.
Unfortunately, federal law does not protect taxpayers from retaliation if more than one creditor has garnished your wages. The same is true if the taxpayer only has one creditor yet the earnings are garnished for two or more types of debt.
Garnishment generally happens after a creditor sues the taxpayer for nonpayment. However, there are situations where the creditor may be able to force garnishment without a court order. The complexities of wage garnishment make it appropriate to speak with a tax professional .
How Can I Stop a Wage Garnishment?
Garnishment generally occurs when the taxpayer owes money to the federal government or another creditor and is subject to a lawsuit. If the lawsuit is successful in court, you may be ordered to wage garnishment along with other financial repercussions.
For this reason, it is important not to allow tax debt to get to the point where the IRS is considering stiff penalties such as wage garnishment. In most instances, garnishment may only occur with a court decision.
Moreover, if you are already a victim of wage garnishment, Levy & Associates can work on your behalf to potentially lower the amount that is deducted from each paycheck. It’s worthwhile to consider, as reducing the monthly amount gives you more back in earnings each paycheck.
Frequently Asked Questions – Wage Garnishment
The IRS can place a wage garnishment on you when you have liabilities. The IRS can force your employer to hold back your weekly wages to pay off your debt. Having your wages garnished can be a difficult and embarrassing experience.
Here are some frequently asked questions about wage garnishment:
Is wage garnishment every paycheck?
Yes, wage garnishment occurs with every paycheck regardless if you receive compensation every week, two weeks, or each month. The amount that is withdrawn from each paycheck depends on state law.
For example, in Colorado, taxpayers may have up to 25% of their paycheck set aside for wage garnishment.
The court ordered wage garnishment and state law will determine precisely how much is deducted from each paycheck to cover back taxes. The wage garnishment will continue until the debt is paid off in full.
Nonetheless, you have legal rights. Contact Levy & Associates at 800-TAX-LEVY if you have questions or concerns.
How do you calculate a garnishment amount?
The amount that is withdrawn from a paycheck for IRS wage garnishment is a court-ordered mandate. Consequently, you determine the amount that you owe to the IRS based on the court decision along with state law.
There is a resourceful Wage Garnishment Calculator that can help you budget for monthly expenses, including repayments to the IRS. Taxpayers may calculate wage garnishments by selecting the pay period frequency and entering gross earnings before deductions.
Then, enter all allowable deductions such as federal income tax, state taxes, city and local taxes, Social Security, and Medicare. Also, you may need to enter deductions for health insurance and disability.
The maximum weekly garnishment is calculated as the lesser of:
- A) The amount by which disposable earnings exceed 30x the federal minimum hourly wage.
- B) 25% of disposable earnings (after federal, state, and local taxes are deducted) *
- *NOTE: Taxpayers that have wage garnishment related to student loan debt have a cap of 15% of disposable earnings.
What happens after a wage garnishment is paid?
There are two reasonable solutions for fulfilling wage garnishment obligations. A) The tax debt is paid in full and wage garnishment is no longer needed, or B) the wage garnishment terms have expired.
In the past, it was required by law for creditors to file a new garnishment every month for a debtor. However, many of those rules have changed which is why most wage garnishments do not conclude until the back taxes get settled.
Once the debt is paid in full, the wage garnishment should cease. If not, you need to notify the employer that the deductions need to stop because the debt has been settled. Please feel free to reach out to Levy & Associates for support during this process.
Stop Wage Garnishment Now with Levy & Associates
Levy and Associates understands how stressful and disturbing a wage garnishment can be to you and your family. Immediately after your call or meeting with one of our tax experts, we will begin negotiations with the IRS to release the wage garnishment.
Often, we can secure a release with our first contact. If not, we will determine what the IRS requires to stop the wage garnishment and work quickly to get your paycheck back into your hands.
Once the wage garnishment has been stopped, Levy & Associates may also resolve other tax issues that disrupt your life. Contact us today to schedule an appointment with a specialist from Levy & Associates and begin your journey toward financial freedom!