Thursday, March 30, 2023

What to do if you owe taxes

 


1) Pay as much as you possibly can right now.
2) You can ask for (and often receive) an extension to pay.
3) "Financial hardship" delay: This is if paying your tax bill would demonstrably affect your ability to pay your other bills. Interest and penalties still accrue.
4) Installment payment plan: If you owe less than $50K in taxes, you should usually be able to get an installment payment plan of up to 72 months, simply by asking for it.
5) Negotiate: This is NOT something to try on your own. We can help, but the number of "Offers in Compromise" that get accepted each year is quite small and a knowledge of how the system works is important.
6) Using existing credit sources (credit card, HELOC, private loans): Some tax advisors would quickly recommend this, but I would NOT recommend you go this route. If you've exhausted the options above, do this instead:
7) Sell something you don't need anymore. Always a pretty good plan anyway.

No comments:

Post a Comment