If you owe taxes to either the IRS or to your state, don't ignore your tax bill!
Some people realize that they either have not had enough money withheld over the year or due to self-employment and/or payroll tax for business owners, they owe more money...but just don't have it.
What should you do?
MAKE SURE YOU FILE THE TAX RETURN!
If you fail to file, you will be facing LATE FILING FEES, PENALTIES AND INTEREST. The worst thing you can do is to ignore you tax bill. IT WON'T HELP OR SOLVE THE PROBLEM!
YOU CAN FILE AN EXTENSION!
By filing an extension (by April 15th) and you have until October 15th to submit the completed return.
If you can submit an estimated amount that you owe (close to the same as last year) with your extension, it will help reduce the interest and penalties that start to add up.
Something is better than nothing!
CONTACT THE IRS TO DISCUSS YOUR OPTIONS
Don't be afraid to call the IRS to explain your situation and find out what you can do to help yourself. However, be prepared to be on the phone for a long, long time! Wait times can be 45 minutes to an hour or more.
When you finally get an IRS representative, you may or may not be able to understand them. I'm not talking just about language differences, but some agents are just not very easy to understand and/or are not very pleasant people!
My advice...hang up and call again. Ultimately, you should get connected to someone who can help. The idea that all IRS agents are mean, hard-hearted people is just not true!
YOU MAY QUALIFY FOR AN INSTALLMENT PLAN
If you file your taxes on time (by April 15th) or if you file an extension, you may be able to set up an installment payment plan.
You can go on line to get the IRS Form 9465.
Click here to get a copy of instructions for IRS Form 9465.
Payments can be made by mail or you can set up automatic payments.
YOU MAY BE ABLE TO NEGOTIATE A REDUCTION IN YOUR TAX BILL!
If you owe several thousands of dollars of taxes, you may be able to negotiate a reduction. This is called "an offer in compromise" and it is similar to a DEBT SETTLEMENT AGREEMENT.
- Be careful of the ads on TV that promise to reduce your tax bill by 80%-90%!
- You have to pay for their services (which if they could deliver wouldn't be so bad), but before you lay out any money, you need to see results!
- Check with your Better Business Bureau and do some research before choosing a TAX REDUCTION COMPANY.
- DON'T IGNORE YOUR TAX BILL!
- FILE A RETURN AND/OR EXTENSION BY APRIL 15TH
- CONTACT THE IRS
- YOU MAY QUALIFY FOR AN INSTALLMENT PAYMENT PLAN
- YOU MAY BE ABLE TO NEGOTIATE A TAX REDUCTION