WHAT TO DO WHEN YOU OWE TAXES TO THE IRS? WHAT IF YOU CANNOT AFFORD TO PAY IMMEDIATELY?
If you find your self in the predicament where you owe taxes, but cannot afford to pay them right away all is not lost. There are a number of options to deal with this circumstance. The IRS have set up a number of methods that allow you to arrange a payment plan to pay the IRS taxes over a period of time.
It is vital that you do not ignore the taxes due as this can lead to interest and penalties.
METHODS FOR PAYING OWED TAXES
There are a variety of payments options available to taxpayers. Two options for those who want to make a payment using the IRS’s electronic payment systems: Direct Pay and Credit or Debit Cards.
Direct Pay- You can pay your tax due from a checking or savings account free with the IRS’s Direct Pay system. You will receive an instant confirmation once the payment is made. Taxpayers can schedule payments up to 30 days in advance, which can be useful in limiting against missing a deadline.
Credit of Debit Cards- As a taxpayer you can also pay your due taxes by debit or credit card online or by phone. Your payment will be processes by a payment processer. The IRS does not charge for this service, however fees can apply and vary depending on the processor.
If you wish to pay your owed taxes using a mobile device, you can use the IRS’s official app: IRS2Go. You can pay with either direct pay or debit or credit card. IRS2Go is currently available on Google Play, Apples App Store and the Amazon App Store.
Those who are unable to pay tax debt immediately can apply to make monthly payments. Before applying for this agreement taxpayer’s must file all required tax returns. You can apply for an instalment agreement through the IRS’s Online Payment Agreement tool (https://www.irs.gov/individuals/online-payment-agreement-application)
THOSE ELIGIBLE FOR A MONTHLY INSTALMENT AGREEMENT:
· Individuals who owe $50,000 or less in combined tax, penalties and interest and have filed all required returns
· Businesses that owe $25,000 or less in combined tax, penalties and interest for the current year or last year liabilities and have filed all required returns.