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Can I Make Payments On My Taxes?

It's a terrible feeling when you discover that you owe on your taxes, and even worse when you don't have the money to pay. You might be tempted to simply not file until you have enough to pay the government in full. But that's never a good idea.

If you can't submit all that is due, you should file your tax return and give as much as you can. You can pay off the balance by setting up a payment plan with the IRS. It will save you money in the long run because the penalty for not filing is much greater than the failure-to-pay penalty. Get started by choosing the payment plan that works best for your situation. Read on, if you're wondering, "Can I make payments on my taxes?"

How to Make Payments on Your Taxes

If you find yourself temporarily short of cash or facing a significant tax bill that could take years to pay off, the IRS may have a payment option that will work for you. Consider the following IRS recommended methods:

Ask for Additional Time

You never know what you can get unless you ask. Based on your circumstances, the IRS may grant a short additional time for you to pay your tax in full. Typical extensions are between 120 and 180 days. Additional Interest and fees may apply during the extension, but you should pay less in penalties and interest than without the extension.

Installment Agreement

The IRS allows you to make smaller periodic payments over time through an installment agreement if you can't pay the full amount at once. Once you've entered into an installment agreement you are considered “in good standing" with the IRS and most state taxing authorities as long as you continue making payments.

If you request a payment agreement through the IRS website you should receive immediate notification if your agreement is approved. If your request a payment plan by mail, you can reduce the accrual of penalties and interest by making voluntary payments until you're notified whether your payment plan request was accepted.

Credit Cards

The federal government accepts most major credit cards for tax payments. Some credit cards charge less than the interest and penalties charged by the IRS on back taxes. However, if you are paying by credit card, you will also be hit with a convenience fee of about 2%, based on the amount you are paying.

Currently Not Collectible

If you owe on your taxes but your current financial circumstances are extremely dire, you can ask the IRS to assess you as Currently Not Collectible. In such a situation, the IRS would determine if the collection of the liability would create a hardship that would leave you unable to meet necessary living expenses.

Get a Loan

Whether it's from a bank or a family member, a traditional loan could be had at a lower interest rate than charged by the IRS. However, if you are having credit problems, it may be difficult to qualify for a loan that has a competitive rate.

Ask for Leniency

If you have a history of paying on time, you may be able to avoid paying the penalty by asking for a first-time waiver. Taxpayers with previous late payments may still be able to have penalties waived if they acted in good faith and can show “reasonable cause" for their delinquency.

Need to Make Payments on Your Taxes? Talk to a Tax Law Attorney Today

Have you received a letter from the IRS demanding payment or threatening a tax lien and are uncertain about your rights? Contacting the IRS can be intimidating, especially when you don't have the money you owe. An experienced tax attorney can advocate for you and negotiate payment terms with the IRS. Protect your interests by contacting an experienced tax law attorney today.

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

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Next Steps

Contact a qualified tax attorney to help you navigate your federal and/or state tax issues.

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