Tips for Taxpayers Who Can't Pay Their Taxes on Time
You can avoid unnecessary penalties and interest by paying your taxes in full and on time. However, if you owe tax with your federal tax return, but can’t afford to pay it all when you file, the IRS wants you to know your options and help you keep interest and penalties to a minimum.
Here are five tips:
- File your return on time and pay as much as you can with the return. These steps will eliminate the late filing penalty, reduce the late payment penalty and cut down on interest charges. For electronic and credit card options for paying see www.irs.gov. You may also mail a check payable to the United States Treasury.
- Consider obtaining a loan or paying by credit card. The interest rate and fees charged by a bank or credit card company may be lower than interest and penalties imposed by the Internal Revenue Code.
- Request an installment payment agreement. You do not need to wait for IRS to send you a bill before requesting a payment agreement. Options for requesting an agreement include:• Using the Online Payment Agreement application at www.irs.gov, and
• Completing and submitting IRS Form 9465-FS, Installment Agreement Request, with your return.IRS charges a user fee to set up your payment agreement. See www.irs.gov or the installment agreement request form for fee amounts.
- Request an extension of time to pay.
- If you receive a bill from the IRS, please contact the IRS or your tax preparer immediately to discuss these and other payment options. Ignoring the bill will only compound your problem and could lead to IRS collection action.
If you can’t pay in full and on time, the key to minimizing your penalty and interest charges is to pay as much as possible by the tax deadline and the balance as soon as you can. For more information on the IRS collection process go to www.irs.gov or see IRSVideos.gov/OweTaxes.
- Payment Options – Ways To Make a Payment
- Other Ways to Resolve Tax Debt That Could Save You Money
- Online Payment Agreement Application
- Form 9465, Installment Agreement Request
- Publication 966, The Secure Way to Pay Your Federal Taxes
- Publication 594, The IRS Collection Process
- Form 1127-A, Application for Extension of Time for Payment of Income Tax for 2011 Due to Undue Hardship ( PDF)
The tax information provided is not intended to be a substitute for specific individualized tax planning advice. We suggest that you consult with a qualified tax advisor like Viridian Tax and Accounting at 206-782-4837 or email@example.com.
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