None of like to pay taxes but it’s our contribution to keeping the country running, and to provide for public services, and state infrastructure. Every year we know it’s time to file for income taxes, even though we believe that the amount is unfair. But just what do you do when you find you don’t have enough savings to cover your income tax bill?
While you can’t go back and fix what’s already happened, here are a few tips to help you manage your big tax bill, and what do to for next year.
It can be tempting to let it sit for months on end, thinking that early next year you’ll pay it off. But you don’t know what will happen between now and then. Remember that you should never spend money you don’t have. If you owe federal taxes, it’s important to get them paid quickly, even if you have to delay that vacation until another year.
The IRS has an online Direct Pay tool where you can log in, make an electronic payout, and you’re done. Don’t wait for them to send you reminders in the mail. Pay your bill now, otherwise you’ll incur late fees and charges.
You have the right to ask for an extension of 120 days (6 months). There is usually no additional fee to make this change. At the same time you can apply for a monthly payment plan to make the process simpler. This type of plan is for those who owe $50,000 or less.
This is an Offer in Compromise. It means that your tax bill can be settled for less than you’re owed, particularly if you believe that you’ll never be able to pay off the full amount.
Most likely this is what got you into trouble in the first place. An adjustment can prevent you being in the same situation the following year. If the cash isn’t on your pay check then you won’t be tempted to spend money you don’t have. You’ll need to fill out a new W-4. This is also important to do again if you’re returning to school or have new additions to your family.
Sometimes you may not know where to turn if your taxes are getting high, with interest tacked on each month. You may need to hire a good tax defense company who will provide consulting on tax relief.
It’s even possible that there have been errors made on your income taxes that lead to an incorrect tax bill. If you feel that you need tax help, or that your tax bill is unfair, please contact Defense Tax today. We can help you figure out the best solution so that your outstanding taxes don’t affect your credit rating, ability to find a new job, or affect your current employment. 866-657-1040. Or visit the website www.defensetax.com