If you owe back taxes with your federal tax return, but can’t afford to pay it all when you file for taxes, knowing your options can help you keep interest and penalties to a minimum.
Here are five tax tips:
- File your income tax return on time and pay as much as you can with the tax return. These steps will eliminate the late filing tax penalty, reduce the late payment penalty and cut down on interest charges.
- 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.
- IRS charges a user fee to set up your tax debt payment agreement.
- Request an extension of time to pay the tax debt.
- If you receive a bill from the IRS, please contact us immediately to discuss these tax problems and payment options. Ignoring the bill will only compound your tax problem and could lead to IRS collection action.
If you can’t pay the tax debt 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. At Freedomtax we take pride in offering honest IRS tax debt relief. If you have any tax debt related problem contact us at 407-344-1012, and we will provide the best tax help possible. God bless.