You may end up in a situation where you cannot afford to pay your taxes due to financial changes or others. During these times, you may wonder whether you should still file your taxes even if you cannot pay, or you should avoid filing them for the year. If you are thinking of not filing your tax return, it will be a big mistake, as the IRS will charge you with a failure to file taxes penalty. So, this will only add up to the amount of taxes you have to pay. Even if you cannot afford to pay your taxes, the good news is that there are several options out there that will not harm your pocket when you pay the taxes.
If this is your first time, you should consider getting assistance from Tax Preparation services, as these experts should be able to help you out no matter the situation you are in as they have years of experience in this field. Let’s take a look at your options if you cannot afford to pay your taxes.
When you file the tax return, inform your situation to the IRS
As mentioned, even if you cannot afford to pay your taxes, you should still file your taxes before the deadline to avoid additional payment. However, when you do file your tax, it is crucial that you let the IRS know of your situation so you can discuss further payment options. This step is essential and crucial if you do not want to see additional bills along with your taxes.
Setup a payment plan
You can set up a payment plan with the IRS depending on the situation you are in. Let the experts you hired for Tax Services help you out with this plan. You can opt for a short-term payment plan, monthly payment plan, Offer in compromise, or temporary delay on collection. In the short-term payment plan, taxpayers are usually given up to 180 days to make the full payment, so if you can get the amount by then, this is a great option.
If you think that 180 days is too little for you, you can set up a monthly payment plan where you can make the set payment overtime. But you should note that you will have to pay some interest and charges. If this two plan does not work for you, you can try out the Offer in Compromise where the IRS will assess your financial situation by checking your ability to make the payment, your income, expenses, and assets. If you are eligible for OIC, the IRS will reduce the amount of payment.
The last option is Temporary Delay on Collection, where the IRS can delay the collection of the bill until you can make the payment after accessing your situation. They will keep a check on your situation to see if you can make the payment, so you will have to pay gradually.
You have other options apart from the payment plans mentioned
Apart from the payment plans mentioned above, you have other options as well; this includes putting it on your credit card, getting a loan, or asking from friends and family. Perhaps getting help from a family member or friend or getting a loan is a better option. However, your decision will vary depending on your situation. And the tax consultancy service providers should be able to help you make a decision that’s in your best interest.
These are some options available if you cannot afford to pay your taxes at the set time. Since there is quite a number of options out there, get professional help and choose one that will be the right fit for you.
Story by Scott Smith
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