Need More Time to Pay Taxes? Read On!
Taxpayers that owe money on their taxes will be glad to know that they have some options if they can’t afford to pay the full tax liability immediately.
Here are 10 things the IRS would like people to know about taking more time to pay their taxes:
1. If a taxpayer can’t pay the full amount, they should pay as much as they possibly can. Paying as much as they can now lowers the amount of penalties and interest that will be added to the amount owed.
2. Depending on the circumstances, taxpayers might qualify for an tax extension on the amount of time they have to pay by making an installment agreement, delay or Offer in Compromise.
3. If you’re unable to pay, you should write to the address or call the number that appears on your bill.
4. You could also think about financing the payment of your taxes by getting a loan. A bank or credit company will still charge interest and fees, but will generally be less than those charged by the IRS for late payment.
5. You could qualify for additional time to pay your taxes in full, up to 120 days. There is no fee for this arrangement, and taking this route could minimize the interest and penalties that get added on.
6. You could also pay with a payment plan, in which you can make manageable monthly payments for a one-time $105 fee. However, if you can arrange monthly debits from a bank account, the fee drops to $52. And low-income taxpayers can get a fee of just $43.
7. You can apply for the payment plan with the Online Payment Agreement form that can be found on the IRS website, or file a 9465 form or an payment plan request, or you can call the IRS at the number found on your IRS bill.
8. Taxpayers might also qualify for an Offer in Compromise, which is a settlement that the IRS makes with the taxpayer making the liabilities less that what was originally owed. The offer won’t be accepted if the IRS determines that the taxes could be paid in one sum or with some kind of a payment agreement.
9. If you do set up a payment agreement, the IRS could still file the tax lien, securing the interest of the government until your final payment is made.
10. You should always respond to an IRS notice. If you fail to pay your taxes or make a payment arrangement, the IRS could take collection actions.
For more information, visit the IRS website at irs.gov.
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