6 Tips for Taxpayers That Owe Money to the IRS
This isn’t so much of a secret than it is a strongly worded suggestion. Nonetheless, it must be said. When some people find out that they owe the Internal Revenue Service (IRS) tax money, sometimes they come up with this indignant reasoning that because they don’t believe that they make enough money, they shouldn’t owe the IRS anything. The reality is, no matter what they think or believe, it won’t change the fact that the IRS is still expecting a payment. So while any one of us might be the first to cross our arms in protest, the only thing that might change our current tax debt situation is taking action and not just ignoring it.
- Avoid getting into more debt just to pay a debt.
However, when it comes to taking action, sometimes the first option is the wrong one—and this is referring to using your credit card to pay your debt. Depending on who you talk to and how dire your tax debt situation is, it might be suggested to you to use your credit card to take care of your tax debt. Sometimes this can work and other times, not so much.
There are too many factors to determine whether or not you should use your credit card to pay off tax debt. Here are a few things to consider:
- How much is the tax debt? – If it’s not an egregious amount, it might be OK to use the credit card.
- What’s your credit card limit and how disciplined are you at paying more than the minimum amount? – If you’re not keeping up with your credit card payments, then forget about it. Also, do you have enough on your credit card to even pay the IRS off—not just a portion—all? If not, you might have two debts to pay: the IRS and the credit card. Now you have two headaches!
- Use additional income to pay your tax debt.
Does your job offer bonuses or incentives? How about the next upcoming tax season? Are you expecting a refund? Alimony or investment dividends can certainly be put towards paying off your tax debt.
- Get another job.
If your tax debt is more than you can pay, perhaps it might be worth considering taking on a part-time job to pay off the tax debt. It might only pay minimum wage, but it’s better than having nothing! Just look at it as a temporary job until you get your finances in order.
- File for an extension.
Once you’ve concluded that there’s no way around getting out of your tax debt obligations, then perhaps all you need to do is just file an extension. If you can’t afford to pay the IRS before the deadline, then give them a call to see what they can do about extending the deadline for you. There may be a late penalty, but it’s better than facing the consequences of not paying at all.
- Try setting up an installment agreement.
If you know that there’s no way that you can pay your tax debt in one lump sum, then call the IRS to schedule a payment arrangement. Together, you and the IRS can set up a monthly installment plan that’s affordable for you.
If you need help executing any of these six helpful tips, call Success Tax Relief, a tax relief firm that specializes in resolving any tax debt issues you might have. Call us today at 1-877-825-1179 or reach us online to schedule a free consultation.