(NewInsights.org) – Income tax is commonly taken out of your paycheck throughout the year to ensure you owe as little as possible when you file your annual taxes. For whatever reason, you may end up owing the government a dollar amount you can’t afford to pay at tax time. There are payment options for people facing this reality, and the IRS is willing to work with you to make your debts right.
What If You Can’t Pay the Taxes You Owe?
If you know you’ll owe the government money before filing your taxes, don’t let this stop you from filing by the deadline anyway. The IRS may penalize and fine you for filing your taxes late, which can only add to the money you’ll owe in the end.
If you’re unaware you would owe money until you’ve filed your taxes, don’t panic. There are options available to help you pay back your debt and restore your good standing with the IRS.
- Borrow money: You can request help from your bank by applying for a debt consolidation plan.
- Call the IRS to explore your options: Dial 800-829-1040 to speak to a representative about any matter related to personal taxes, including payments. Dial 800-829-4933 for issues related to business taxes.
- Request an extension: You can ask the IRS to grant you a filing extension, giving you more time to collect the funds you owe. Be aware you may incur interest on what you owe during the deferment period and will be responsible for paying the additional charges.
- Set up a payment plan: The IRS is good about working with those who owe money. You can request installment payments to help you budget your money and slowly pay off your debt to the IRS over time.
- Borrow from your 401(k): Some 401(k) plans allow you to withdraw up to 50% of your savings to pay taxes. You generally must pay it back within a 5-year limit.
Hire a Tax Attorney
Dealing with the IRS is no joke. If you aren’t well-versed in taxes, it is a good idea to hire a professional who can help you find a solution. They’ll work through the numbers with you, form a plan and cover all the bases, so you don’t get into any more debt with the government.
Tax attorneys understand tax laws and proceedings better than local tax preparers. If you have financial and legal issues involving the IRS, you’ll benefit from asking an expert for guidance and help to resolve these issues so you can move on with a clean slate.
The bottom line: don’t avoid paying off debt to the government if you owe them taxes. There are options and solutions to help solve this debt. These existing balances won’t disappear over time, and they will only create more issues if you don’t resolve them.
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