What If You Can’t Pay Your Tax Bill?
If you’re ready to file your federal tax return, but have no way of settling your bill in full, what can you do? Do you just ignore the problem and hope it will go away, or do you take the initiative to do something positive to solve the problem?
Bearing in mind how tenacious the IRS is when it comes to collecting what is due, you can be sure the problem will not go away. In fact, ignoring the issue will definitely make it worse and more expensive. The good news is that there are a number of flexible options that will help you pay your bill in full and avoid any penalties.
File Away Even If You Can’t Pay
Even if you are sure you cannot pay your tax bill, you should file anyway. Penalties apply if you fail to file as well as if you fail to pay.
You should also collect together all paperwork pertaining to your tax bill. Getting organized will help you to understand your position, answer questions the IRS may put to you with confidence and secure the way to paying your tax bill without more interest or penalties.
Apply to Pay By Installments
If you cannot pay your tax bill in one payment, you could apply for what is known as an installment agreement with the IRS. You can apply online or you can also apply by mail using IRS form 9465. Fees do apply if you would like to pay by installments, but can be cheaper if you sign up online or pay by direct debit.
Make an Offer in Compromise (OIC)
Depending on how much you owe and the chances of you ever paying your full bill, you could apply for an Offer in Compromise (OIC). An OIC allows you to settle your tax bill for less than the sum owed. There are a number of circumstances that the IRS may consider, including your income, expenses and any equity on assets.
Ask For Additional Time
If you need more time to pay your tax bill, the IRS may grant you an extension. You may need to prove that you will be able to settle the bill imminently, and the time you are allowed will only be brief. However, it could be enough time to give you a little breathing space and get organized.
We Can Help
If you are worried about paying your tax bill on time, we can give you professional support and advice that will make the problem much easier to manage. Call us today to get started.