What To Do If You Owe More Than You Can Pay In Taxes
It’s tax season! For some, this means we have cash to look forward to. For the remainder, it means another bill. Tax day 2018 is Tuesday, April 18th. If you’re one who owes and find yourself unable to pay, what should you do? First, you should make sure you at least file your taxes. Don’t let your inability to pay to keep you from filing. There are options if you find that you’re unable to pay:
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Get a short-term payment extension
You can apply for a short-term payment extension through the IRS if you know you can pay the full amount owed in 120 days or less. The application can be done online at IRS.gov or by calling the phone number on your tax bill.
Apply for a payment plan
Using Form 9465, you can apply for a payment plan if you owe $50,000 or less. The process can also be completed online or on the phone. The IRS charges a low fee for payment plans, but it may be your best option depending on your credit card rates or financial issues.
Settle for less than you owe
The IRS may offer you the option of an Offer in Compromise (OIC). The OIC allows you to settle the tax amount you owe for less. Offers can vary, but it’s worth looking into if you find yourself struggling to pay your tax balance.
Consider a personal loan
Depending on your credit card rates a personal loan may be the best option to pay your tax debt. Personal loans often offer lower rates than those on credit cards and may offer a fixed term, rate, and monthly payment for you. You can check your rates and offers without impacting your credit score by filling out our quick form.
Pay with a credit card
Not the ideal option, but an option nonetheless. The IRS accepts the major credit cards, and payment can be done online or by phone. Credit card payment should not be the first option you choose because the interest and fees you’ll pay can add up quickly and hurt you financially.
Whatever your situation is, don’t avoid the IRS. Tax bills won’t just disappear, and failure to pay can lead to your passport being seized. Don’t be afraid to give the IRS a call. They’re willing to work with you if you reach out.