While most of you patiently wait your refund check from the IRS each year, some of you do not. Here are some tips for those of you who owe taxes this year:
1. Tax Bill Payments: If you receive an IRS bill this summer, you should consider paying it in full right away to avoid the interest and penalties the IRS must charge by law. If you cannot pay it all right now, consider getting a loan because the interest rates may be lower than the fees associated with late payment to the IRS. You can make payments with check, cash, credit/debit cards (fees may apply, must use processing company ), EFT ( Electronic Fund Transfer ), money order or cashier’s check.
2. Payment Extensions : You could qualify for a short-term agreement to pay taxes if you can fully pay in 120 days or less. You can request it through the Online Payment Agreement application on the IRS website.
3. Installment Agreement : If the above options are not viable for you, you may apply for a monthly payment plan. You can apply using the Online Payment Agreement if you owe less than $50,000. If approved, you’ll be notified immediately and can set up a direct debit account to make your payments
4. Offer-in-Compromise : The IRS offers an Offer-in-Compromise program which allows you to settle tax debt for less than the full amount owed. This may be an option for you if you can’t full pay through the aforementioned payment options. You can use the OIC Pre-Qualifier tool to check for your eligibility.
5. Fresh Start : If you are struggling with your tax payments, the IRS offers a Fresh Start initiative that could help.