Can’t pay your income taxes? Still file!

Even if you can’t pay the taxes on your current tax return, you should still file the return on time, if possible. What you do not want to do is ignore the tax due.  If you cannot file the return on time, you should file an automatic extension of time to file.  Please note that this is an extension to file the tax return, not an extension of time pay the tax.  By filing this extension you will avoid several IRS

 

penalties, such as the Failure to File penalty and the Late Filing penalty. There are several ways you can arrange to pay the tax to avoid penalties and sometimes interest. This extension of time to file will give you until October 15 to file the return and find the money.  However, interest will be charged on the amount you owe from April 18 until paid. Second, try to get a loan to pay the tax. If you borrow against the equity in your home, the interest will probably be deductible next year.  Third, you can now pay your taxes by credit card.  One provider is at 1-800-972-9829. Finally, you can set up an Installment Agreement with the IRS to pay the tax over time.  If you want to do this, you should send the Request for Installment Agreement with your tax return.  The monthly amount you request to pay should be great enough to p[ay off the tax within five years.  Also, you can choose the day of the month that you want your payment to be due, up until the 28^th.