What To Do If You Can"t Pay What You Owe The IRS
It has been a very long time since we've gone through two rough economic years like 2008 and 2009. Many people are just trying to survive this period. I know I am! With the deadline for tax filing extensions just around the corner, what do you do if you can't afford to pay your taxes?
Cash flow is a concept often associated with businesses. In truth, we all know what it is even if we don't call it by this name. Cash flow is the money you have on hand to pay your debts. Most Americans have been suffering in one form or another financially the last few years as the housing market and economy has fallen off the map. This has led many of us into cash flow problems.
2008 was a brutal year for you financially. You limited your tax payments to get by each month. You filed an extension on your taxes this past April. The extension period is now about to run out in September for corporations and October for individuals. You know you are going to owe $7,000 or so. Even worse, there is simply no way you are going to have enough money on hand to pay that tax bill. What do you do?
The first thing to understand is you are hardly the only person in this situation. The unemployment rate is getting ready to head past 10 percent. The housing market is continuing to spiral downwards and millions are upside down on their homes. Taxes are probably the least of your worries, but there is some good news. The IRS will not be beating on your door or hauling off your car to an auction if you take a basic step.
The powers that be at the IRS are fully aware that the economic problems in this country have left people in financial dire straits. The goal of the agency at the moment is to keep you in the system. This means you need to file tax returns regardless of whether you have money to pay the actual tax due or not. Once you take this step, you can apply for a payment plan.
The beauty of this process is it is automated and you don't have to even talk to anyone at the IRS. Just go to the website for the agency. Search for "Online Payment Agreement Application". There is often a link on the home page. Regardless, click on to the application and fill it out. As long as you owe less than $25,000, the program will automatically approve you and the terms will be sent to you.
The advantage of this approach is you get relief on your tax liability. There is a downside, however. The payment schedule is similar to a credit card. Put another way, you'll end up paying and paying and paying for year upon year. Your goal should be to pay the note off as soon as possible to avoid this.
You don't need to panic if you don't have money to pay your taxes this year. You have options and a payment agreement is usually one of the best.
Cash flow is a concept often associated with businesses. In truth, we all know what it is even if we don't call it by this name. Cash flow is the money you have on hand to pay your debts. Most Americans have been suffering in one form or another financially the last few years as the housing market and economy has fallen off the map. This has led many of us into cash flow problems.
2008 was a brutal year for you financially. You limited your tax payments to get by each month. You filed an extension on your taxes this past April. The extension period is now about to run out in September for corporations and October for individuals. You know you are going to owe $7,000 or so. Even worse, there is simply no way you are going to have enough money on hand to pay that tax bill. What do you do?
The first thing to understand is you are hardly the only person in this situation. The unemployment rate is getting ready to head past 10 percent. The housing market is continuing to spiral downwards and millions are upside down on their homes. Taxes are probably the least of your worries, but there is some good news. The IRS will not be beating on your door or hauling off your car to an auction if you take a basic step.
The powers that be at the IRS are fully aware that the economic problems in this country have left people in financial dire straits. The goal of the agency at the moment is to keep you in the system. This means you need to file tax returns regardless of whether you have money to pay the actual tax due or not. Once you take this step, you can apply for a payment plan.
The beauty of this process is it is automated and you don't have to even talk to anyone at the IRS. Just go to the website for the agency. Search for "Online Payment Agreement Application". There is often a link on the home page. Regardless, click on to the application and fill it out. As long as you owe less than $25,000, the program will automatically approve you and the terms will be sent to you.
The advantage of this approach is you get relief on your tax liability. There is a downside, however. The payment schedule is similar to a credit card. Put another way, you'll end up paying and paying and paying for year upon year. Your goal should be to pay the note off as soon as possible to avoid this.
You don't need to panic if you don't have money to pay your taxes this year. You have options and a payment agreement is usually one of the best.
