Options For When You Can"t Pay Your Tax Bill
Sometimes situations arise when you are strapped for cash and you may not be able to pay the tax that you owe to the IRS at the due date.
If you are in such a situation, you must not neglect to file your tax return because the penalty imposed on you will be greater when you file your tax returns late when compared to the penalties imposed on late payment of taxes.
So, make sure that you file your tax returns at the right time.
When you cannot pay, one of the easiest and best solutions to prevent future penalties and interest for not paying is to setup an installment agreement.
In order to apply for an installment plan you must file IRS form 9464 to request the installment agreement.
If the IRS approves your request then you must pay them monthly along with the interest.
If you miss any payment then they will impose more penalties on you and you will have to pay a reinstatement fee.
A second method to pay for the tax amount owed is to pay for it on a credit card.
The advantage of using this method is that you can pay the full amount of tax to the IRS and avoid penalties and future interest.
The main problem with this method is that if you cannot pay off soon, you will end up paying more in interest to your credit card company than you would have made to the IRS if you chose to setup an installment agreement.
Another way is to hire a tax relief professional to solve your tax problems.
A tax professional can help you in filing your tax return and maximizing your deductions as well as making other appropriate filings with the IRS regarding your inability to pay.
You cannot use a normal tax preparer to do this, you will need to use a tax relief professional.
Tax relief professionals can be CPAs, tax attorneys, or enrolled agents.
These professionals will also be able to analyze your financial situation and determine the best method for you to pay your taxes back to the IRS.
Sometimes, they may be able to settle your taxes for far less than you owe if they can prove to the IRS that you will likely not be able to ever pay the tax amount owed.
A final option you can consider if you cannot pay your taxes on time is ask for an extension.
In order to do this you must file your request to the IRS.
You can get a maximum of six months period if the IRS approves your extension request.
This is a good option if you just need to get some more time to get the money together to pay the IRS or you need the time to work out a payment plan and fill out that paperwork.
When it comes to not having money to pay taxes owed, you can be assured that there are plenty of options for you.
The most important thing you can take out of this is that no matter how much you owe and how bad your financial situation you must always file a tax return anyways, it will save you lots of money down the road.
If you are in such a situation, you must not neglect to file your tax return because the penalty imposed on you will be greater when you file your tax returns late when compared to the penalties imposed on late payment of taxes.
So, make sure that you file your tax returns at the right time.
When you cannot pay, one of the easiest and best solutions to prevent future penalties and interest for not paying is to setup an installment agreement.
In order to apply for an installment plan you must file IRS form 9464 to request the installment agreement.
If the IRS approves your request then you must pay them monthly along with the interest.
If you miss any payment then they will impose more penalties on you and you will have to pay a reinstatement fee.
A second method to pay for the tax amount owed is to pay for it on a credit card.
The advantage of using this method is that you can pay the full amount of tax to the IRS and avoid penalties and future interest.
The main problem with this method is that if you cannot pay off soon, you will end up paying more in interest to your credit card company than you would have made to the IRS if you chose to setup an installment agreement.
Another way is to hire a tax relief professional to solve your tax problems.
A tax professional can help you in filing your tax return and maximizing your deductions as well as making other appropriate filings with the IRS regarding your inability to pay.
You cannot use a normal tax preparer to do this, you will need to use a tax relief professional.
Tax relief professionals can be CPAs, tax attorneys, or enrolled agents.
These professionals will also be able to analyze your financial situation and determine the best method for you to pay your taxes back to the IRS.
Sometimes, they may be able to settle your taxes for far less than you owe if they can prove to the IRS that you will likely not be able to ever pay the tax amount owed.
A final option you can consider if you cannot pay your taxes on time is ask for an extension.
In order to do this you must file your request to the IRS.
You can get a maximum of six months period if the IRS approves your extension request.
This is a good option if you just need to get some more time to get the money together to pay the IRS or you need the time to work out a payment plan and fill out that paperwork.
When it comes to not having money to pay taxes owed, you can be assured that there are plenty of options for you.
The most important thing you can take out of this is that no matter how much you owe and how bad your financial situation you must always file a tax return anyways, it will save you lots of money down the road.
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