I Owe $30,000 to Social Security After Going Back to Work – Is My Life Over?

It’s shocking and horrifying to get a surprise tax bill from the IRS, especially if it’s in the five figures. In this piece, we’ll look at the case of a Reddit user who was receiving Social Security benefits but went back to work, complicating things and resulting in a big, fat IRS debt. Undoubtedly, there was a massive miscommunication here that has put this individual between a rock and a hard place. And while it seems like they’re officially financially ruined since they’re already living paycheck to paycheck to make ends meet, there is hope.

As with most cases involving huge debt loads, there is a way out. And in this piece, we’ll go over a few steps an individual should take as they tackle a sticky situation that, I believe, is more manageable than it seems at the height of the panic. At the end of the day, student loan debts of a far larger amount are on the shoulders of new graduates. And while it’s not quick or easy to climb back to even, the key is taking the small steps so that one can, in due time, get back on the high road and back into the green.

A surprise IRS debt is disgusting. But one must take time to cool one’s emotions.

A four or five-figure debt surprise is enough to make just about anyone sick to their stomach. However, all hope isn’t lost, especially since the individual is working. Of course, it’s tough to chip away at debt if one’s spending every single dollar that’s coming in. That’s why it’s so vital to have a plan to pay back the debt. In the meantime, though, one should take time to ensure they’re calm enough to make the next big step.

Indeed, it’s easy to think that one’s life is over once one falls deep into debt. But that’s simply not the case, especially if an advisor can be brought aboard to strategize a plan to climb out of the pit.

Reaching out to a tax pro with Social Security and disability law could make a lot of sense.

The matter our Reddit user fell into is quite complicated. And it may not be entirely their fault. That’s why bringing aboard a tax pro could help one determine whether or not it makes sense to file for a waiver or anything else that may allow for a bit of relief (perhaps less interest?). Indeed, there are no guarantees that the IRS will back down.

Worst comes to worst, the $30k in debt may stay in place, but there is no harm in trying to see if there’s a way to reduce the debt or interest, especially if one lives with a disability and has serious financial struggles.

Meet up with a financial advisor to formulate a debt repayment plan.

If the mistake was made by the individual, the IRS may not back down. In that case, it’s time to get serious about an aggressive debt repayment plan. Of course, living paycheck to paycheck makes it such that the debt has nowhere to go but higher as interest surges.

If our Reddit user can’t keep trimming away at monthly costs and there are no luxuries to cut, perhaps getting a second source of income could help do wonders for the climb out of debt. Indeed, earning more instead of spending less is often the key to climbing out of seemingly insurmountable levels of tax debt.

The bottom line

Is this individual’s life over? Most definitely not. They may be in a very difficult spot, but there are numerous steps to take to tackle the debt. First, communicating the matter with the IRS and a tax or legal pro is the way to go. Perhaps interest on debts could be reduced or something of the sort. Next, setting up a debt-repayment game plan is the way to go. Whether it entails cutting costs, selling assets, or reducing income, there’s more than one way to climb out of debt.

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