To be honest, skipping income to pay your taxes payments and filing is the least you want to do. The trouble of getting yourself in that situation paints a bad picture as it stains your personal background in general.
Photo by Jarmoluk
You know how powerful the IRS is and if you fail to pay and file your taxes, they can easily seize your bank accounts, hold your properties and take care of your wage. It’s good that many people fear the IRS otherwise, who knows what could happen if they just take tax filing a joke.
TK *Discuss serious legal and financial consequences
Ask for an extension. If you find yourself in a situation where you really can’t file on the deadline, you can ask them for an extension of at least six months. Chances are, they’ll approve. Do expect however, to pay for penalty fees.
If you find yourself in unforeseen events such as divorce, unexpected death in the family or hit by a natural disaster, the IRS may exempt you from penalties.
File anyway. Yes, whether or not you can pay the amount you owe to the IRS, do still file your return on or before the deadline. The penalty you’ll be charged with for failing to file or send a certified letter for an extension would be 5% of what you owe monthly. The cost of failure to pay is ten times more, add to that some additional fees and interest.
Ask if there can be installment agreements. Those who owe $50,000 in taxes are allowed to make monthly installments. Accomplish and attach the Installment Agreement Request form to your return.
You can alo make direct withdrawal of payment from your bank account for convenience. You’ll set up a monthly payment amount and due date fit for you. Do take note that you’ll still have to pay for late payment fines and monthly interest.
Make use of your credit and/or debit card.
The IRS accepts credit and debit card payments for taxes owed. The good news is the IRS doesn’t charge a fee for this, but that doesn’t mean it’s free. The company that processes your payment will charge either a “convenience fee” for a credit card transaction, or a “flat fee” for a debit card transaction. The amount charged by the payment processor is posted on the IRS website.
Negotiate with the IRS. if you’re in a position where paying your debt to the IRS comes last in your priorities, you might want to take a step forward and negotiate with them.
For instance, if you’re getting through a divorce and paying child support and have pre-existing back taxes. Chances are your current tax debt gets a cold shoulder, with everything on your plate, it’s fully understandable. So the best way to deal with this is negotiate with the IRS for they may approve you settle your debt for less and in installment payments. The IRS aren’t all cold-hearted, you know.
Consult with a tax professional. When you’re lost with the numbers and have no clue what to do next, it’s time you consult with a tax specialist for they will be the one who would negotiate directly with the IRS on your behalf.
These professionals know which settlement option best fits your situation and so shall make the offer to the IRS for compromise. When in doubt and lost when dealing with filing for your tax return, reach out to a professional.
About Chie Suarez
Chie is a daytime writer for Depreciator – Tax Depreciation Schedule, a company dedicated completely to Tax Depreciation Schedules that aids the Australian property market.