What to Do If You Can t Pay Your Taxes
Below is a MRR and PLR article in category Finance -> subcategory Taxes.
What to Do If You Can’t Pay Your Taxes
Summary
As the deadline for tax filing extensions nears, what should you do if you can't pay your taxes? It's crucial to file your return on time and pay as much as you can. Here are some additional steps that might help.Payment Options
Credit Cards
You can pay your taxes using American Express, MasterCard, Visa, or Discover. Consider these options:- Official Payments Corporation: Call 1-800-2PAY-TAX (1-800-272-9829) or visit [www.officialpayments.com](http://www.officialpayments.com).
- Link2Gov Corporation: Reach them at 1-888-PAY-1040 (1-888-729-1040) or [www.pay1040.com](http://www.pay1040.com).
Installment Agreements
If using a credit card isn't feasible, consider an installment agreement to pay your balance over time. If your financial situation is very difficult, you might explore reducing your tax amount through the Offer in Compromise program.To set up an installment plan, complete and attach Form 9465 to your tax return. The IRS offers a streamlined approval process if your total taxes (excluding interest and penalties) are $25,000 or less and can be paid within five years. Indicate your proposed monthly payment and preferred payment date. Ensure you can commit to these payments.
The IRS charges a $43 fee to establish an installment agreement. Interest and a late payment penalty apply to the unpaid taxes. Generally, the late payment penalty is 0.5% per month of your unpaid tax. If you have an installment agreement and filed by the due date, this rate drops to 0.25%. The maximum penalty is 25% of the late-paid tax.
Filing Penalties
If you miss the filing deadline (including extensions), you may incur a penalty for late filing. This penalty is usually 5% of the unpaid tax per month, up to 25%.Final Thoughts
Even if you’re financially strapped, the IRS encourages you to file your tax return on time. After filing, they will work with you on payment solutions. Don’t stress?"many Americans face the same challenges.You can find the original non-AI version of this article here: What to Do If You Can t Pay Your Taxes.
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