There are many
reasons why a person might owe money to the IRS. The reasons, however, are not
what’s important. What is important is paying the money that’s owed. If you’re
unable to do that, then you do have a few options. Make sure you pick one of
these smart ways to pay, rather than doing something drastic and potentially
illegal!
File Anyway
If you’ve done the
math and have realized there’s no way you can pay your taxes this year, file
anyway. Remember, you are legally required to file taxes each year. If you
don’t, you’ll face penalties for filing late, which would only be added to that
money you can’t pay. You can request extensions and find ways that make paying
your taxes manageable. In fact, that’s what you have to do because just failing
to file and ignoring the problem isn’t going to get you anywhere.
Pay in
Installments
For most people,
paying the monies owed to the IRS isn’t the problem; the problem is being asked
to pay it all at once. Fortunately, the IRS will almost always work out payment
plans with people who owe. Those who owe less than $50,000 can fill out an
installment agreement request (Form 9465). If you owe more than that, talking
to an IRS agent individually may result in a payment plan you can manage.
Talk it Out
Finally, no matter
what, remember that you can’t hide from the IRS. If you’ve gotten yourself into
a bad situation and are unsure how to “pay it away,” contact the IRS and ask
about your different options. Or, you could also work with a financial advisor
to come up with a “payback plan.” The important thing is not to hide from your
financial problems but to be proactive and willing to fix them.
Remember, everyone
makes mistakes and gets into tough financial situations. Don’t fault yourself
for that; just find the right way to get out of the situation.
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