Tax season is in full swing and the time is nearly here to pay the tax man. For the many of you out there wondering how you’ll ever be able to pay your taxes in full, don’t give up just yet. There are likely still a few options open to you. Check out some of the potential solutions we’ve found below.
What If I Can’t Pay My Taxes in Full?
First, it’s important to understand that you Must File even if you don’t think you can pay your income tax in full. You are risking heavy penalties if you do not file your taxes!
Once you’ve filed, then you can start thinking about how to pay the bill. Here are some suggestions we’ve found that may help you:
- Asking for an extension may get you enough time to gather the funds to make a payment. At the very least it may give you more time to figure out another option.
- The IRS will allow you to set up an installment plan online if you owe $50,000 or less. You won’t even have to talk to an agent. You have to have filed all of your tax returns before you can apply for the installment plan. Also, there are fees attached to the application, and your tax debt will incur interest while you make payments, so don’t put them off.
- Paying with a credit card is another option. While it’s not generally a good idea to trade one debt for another, borrowing from Peter to pay Paul may be your best option if timing is the reason behind your inability to pay in full. Pay as much of the tax debt as you can without a credit card and charge the rest.
- Make a partial payment, and accept the penalties for whatever you can’t pay. The penalties for nonpayment reflect the amount you owe, so if you can pay part of it, at least the penalties will be less.
- You may be able to negotiate an offer in compromise. An OIC will allow you to pay less than the full amount you owe. The IRS usually won’t take an OIC unless it determine that it is unlikely to receive any payment over a long period of time. It will review your income and assets before deciding whether or not an OIC is in their interest.
If you simply cannot pay your taxes due to some unforeseen or uncontrollable factor, such as losing a job, just talk to someone with the IRS. They will try to work with you. There are options available to you.
For a free consultation, call or fill out an online form today, and find out how a bankruptcy lawyer at Julian, Crowder & Shuster may be able to help you.