Tax season is one of the most stressful times for taxpayers. Not only do you have to file your taxes, but you also have to pay any taxes that are due. If you cannot pay your tax bill in full, the IRS will likely send you a bill with additional interest and penalties on it.
Having tax debt can be very stressful and overwhelming. However, there are some ways that you can get rid of it sooner rather than later. The IRS understands that not everyone can pay their taxes in one lump sum on April 15th, which is why they offer several repayment plans.
By taking advantage of these opportunities, you can settle your tax debt and avoid negative consequences like an audit or even imprisonment.
What Is Tax Debt?
Tax debt is the amount of money that you owe to the IRS. It can happen for many reasons, including not filing your taxes, getting a tax refund when you don’t deserve one, or underpaying your taxes.
If you end up owing money to the IRS, they will send you a bill with the amount that you owe, plus interest and penalties on that amount. While the IRS is a government agency, they understand that people may not be able to pay their taxes in one lump sum.
That’s why they offer repayment plans to people with tax debt. With these plans, you can pay off your tax debt over time in small increments. If you have tax debt, the best way to get rid of it is to file your taxes and pay what you owe.
Of course, that’s not always possible. So let’s look at the 3 steps you should take if you’re unable to pay off what you owe.
1. Pay Your Taxes on Time—Even if You’re Unable to Pay
While it’s true that paying taxes isn’t optional, the amount of taxes you pay isn’t always up to you. If you are unable to pay the taxes you owe, you should still file your tax return on time.
This will let the IRS know that you have income that could be taxed. By filing your taxes on time, you are still following the law and avoiding any penalties.
By paying what you can now, it could help you avoid a larger tax bill in the future. If you think you will have trouble paying your taxes, you can apply for an extension. The easiest way to apply for an extension is to use the IRS online system.
Extending your taxes gives you a little extra time to file your taxes and pay what you owe. You are still expected to pay what you can by the regular tax deadline. If you don’t have the money to pay what you owe, you can apply for a tax payment plan with the help of an enrolled agent or a tax professional.
2. Set up an IRS Installment Agreement
If you cannot pay the full amount of taxes that you owe in one lump sum, then you may be eligible for an installment agreement. This is a three-step process that allows you to pay your taxes over a set period of time.
The first step is to complete Form 9465, Installment Agreement Request, which you can use to request an installment agreement online. If you are denied an installment agreement, you can request a written explanation from the IRS.
The second step is to gather documentation. You will likely be asked for documentation to show that you don’t have the cash to pay the taxes that you owe. The third and final step is to send your paperwork to the IRS. You can either mail it or fax it.
The IRS has a 60-day window to respond to your request and set up an installment agreement. However, don’t wait until the last minute to submit your request. The sooner you file it, the more time the IRS has to consider your request.
If you have bad credit, an installment agreement could be a good option to help you pay down your tax debt. You’ll pay interest on the taxes that you owe, but you’ll get the debt paid off faster.
3. Speak with a Tax Debt Attorney
If you have tax debt and are unable to pay it in full, you may want to consider hiring a tax debt attorney. Tax attorneys can help you navigate the tax system and negotiate with the IRS to get your tax debt reduced.
Tax attorneys are experts in the tax system and can help you get back on track and avoid future problems with the IRS. If you have significant tax debt, you may want to consider hiring a tax attorney to help you negotiate with the IRS.
A tax debt attorney can help you come up with a payment plan that works for your budget. Tax attorneys also know the ins and outs of negotiating with the IRS and can help you get your tax debt reduced as much as possible.
Tax Debt Attorney Mary King Can Help You Settle Your IRS Matters
If you have tax debt, you should work with an experienced tax debt attorney. At the Law Offices of Mary E. King, you have a legal team on your side that will assist you in settling your debts. To arrange a consultation to discuss your tax matters, use the contact information below to get started.