Does one of these situations fit you? You’ve done the right thing and filed your taxes, and now you owe the IRS money that you just don’t have. Maybe you haven’t yet filed your taxes, but you’ve done the calculations and you know you owe more money than you can afford.
If you owe money on your taxes this year and can’t afford to pay you’re probably worried-but the first thing to remember is there’s no need to panic. Owing money to the IRS can be frightening, especially if you’re not sure whether you can find the cash to pay. Don’t worry just yet, however. You have some options for finding the money; it’s just a question of approaching the problem systematically and choosing the option that will work best for you.
What are your Options?
Check out these tips and options for filing your taxes when you’re not sure about your ability to pay what you owe.
1 Stay calm. There’s almost always a workable solution, so there’s no need to panic.
2 Figure out how much you owe, rather than depending on an estimate. You might actually owe less than you think.
3 Find out if you can use qualifying deductions to reduce the amount you owe. Many people are eligible for deductions they’re not aware of, so this could help reduce your tax bill.
4 Look at your financial situation and figure out if you can somehow obtain the money immediately.
5 If there’s no immediate way of getting the money, consider borrowing-perhaps from a friend or family member, a credit card, your mortgage, or a loan.
6 Pay the money when it’s due if at all possible-if not, see below.
7 If you can’t pay the bill when it’s due, contact the IRS and discuss the possibility of paying by installments, or setting up a payment plan. If you’re really stuck for the money they’ll usually be willing to help you out in this way.
8 Don’t be an ostrich-ignoring the problem won’t make it go away, and if you skip paying there will be consequences somewhere in the future.
Relax and Take it One Step at a Time
Owing the IRS can be stressful if you don’t know where the money’s going to come from, but it’s almost always possible to find a solution that won’t put too much strain on you or your finances. Even if you don’t have the money right now you’ll likely be able to work out a payment plan. The important thing to remember is that it’s best to pay as soon as you can, rather than letting the debt to rollover to the next year, as these types of problems have a way of snowballing from year to year.