On Your Side: Options if you can’t pay Uncle Sam
SPRINGFIELD, Mo. (KY3) - The tax deadline is fast approaching. It’s April 18.
Here are your options if you can’t pay what you owe.
Pay What You Can:
First, pay as much as you can when you file your return. That lowers your balance and cuts down on penalties and interest.
Pay Rest on Credit Card:
“That pays your debt to the IRS and stops interest and penalties from them,” said Tiffany Cossey, Drury School of Accounting, “You just have to make sure you pay off your credit card.”
Request an Installment Agreement:
This costs about $40. It’s a payment plan.
“Interest and penalties will continue to run on the unpaid balance, but they will work something out with you if they feel you are not in a position to pay,” said Cossey.
Offer in Compromise
If you still cannot pay what you owe Uncle Sam, there’s an offer in compromise. You must prove you do not have the means to pay the full amount. You’ll likely have to disclose your assets and income. Experts say getting approval to pay less than what you owe is rare.
“There are a lot of firms out there that advertise nationally that they’ll help you settle your tax debt for pennies on the dollar. That’s what they’re doing -- an offer in compromise, but you do want to keep in mind there are very few cases where you can settle for pennies on the dollar,” said Cossey.
Suppose you have not filed your taxes. File asap. That way, you can figure out what you owe and make a plan.
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