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The best advice I can give anyone that can’t pay their tax bill by the April 18th deadline is: Don’t avoid the problem! You can’t solve it by not filing. You can’t solve it by hiding from the IRS. Face the issue head on, then make sure you’re never in that position again.
The good news is that it can be done if you just know where to start. Here are a few items that are important to understand when you’re challenged to pay your tax bills:
- File your taxes by the April 18 deadline, even if you don’t have the means to pay your taxes.
The penalty for not filing your taxes can be 10 times as much as the penalty for not paying, so make sure you file your return on time! Also, an experienced tax pro may be able to find credits and deductions for you that will lower the amount you owe (so find a good one). And when you owe the IRS, every dollar counts!
- Pay as much as you can when you file.
Pay as much as you can! This will reduce the penalties, reduce your debt to the government, and it will increase your likelihood of getting a payment plan approved. And remember, taxes are due April 18 with or without a filing extension.
- Keep paying.
You’ll likely have 6-8 weeks before the IRS contacts you about the rest of the money you owe. During that time, keep throwing every available dollar at the balance with the goal of paying it off before they ever contact you. If you’re not able to pay it all by that time, the IRS will likely allow you to pay the rest in manageable, monthly installments (a payment plan). If you work on the problem and do not run from it, you are a lot better off, and that is easy advice for me to give…
- Fix the problem.
Work with your tax pro to make sure you’re not stuck with a “surprise” tax bill again. That may mean setting aside profits from a side business or adjusting the withholding from your paychecks. Whatever the issue, a tax pro will be able to spot the problem and help you fix it going forward.
If you have found yourself to ever be in this situation, or if you want to prevent yourself from being in this situation, shoot me an email at dlucas@credofinance.flywheelsites.com, and we can schedule a time to discuss how I might be able to serve you!
He has accrued broad financial experience working with companies ranging in revenues from $50,000 to $60 billion.Dan has worked with technology services, software, real estate, retail, manufacturing companies, professional services firms, marketing/advertising agencies, dental practices, medical practices, and various other industries, providing each with the specific financial guidance needed to establish sustained business growth and financial health.