What are My Options if I Canít Afford to Pay My Taxes?


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Paying taxes is difficult for individuals that work as independent contractors, freelancing and when they own a small business. However, there are options available to these persons that make paying taxes less difficult, and it is important to reach out when there are any problems in completing the task of paying federal or state taxes.

Not being able to pay the full amount of taxes that are owed is a common issue for several persons in the United States. When the income or other taxes are owed to the government for a business, self-employment or when a person is freelancing, the Internal Revenue Service may calculate a certain amount owed to the federal government. It is important to contact the IRS when taxes are owed to determine the best course of action available to the individual. Then, it is possible to discover the possible paths that permit the paying back without needing to give all the funds over at once.

Payment options should be discussed with the IRS when taxes are owed. If the filing for a return is not completed by the deadline, there are often penalties, fees and interest added on to the already late payment. There are some options available such as a short-term extension, an installment payment plan based on what income is available to the person and even a temporary delay of collections based on how much disposable income is left over after bills are paid. Some form of compromise should be possible based on the situation, and the IRS may work with the taxpayer to determine the best one.

Payment Plan

Once the IRS has been contacted about the inability to pay the fees all at once, it may be possible to setup a payment plan. These are often possible through online electronic portals. The individual may use his or her phone, a mobile device, tablet or a computer. There is a website available to those that are able to access the internet. It is even possible to do so at a library or internet cafť. Payments may be scheduled in advance, and a confirmation is received once the payment has been completed. Encryption through a Secure Socket Layer or SSL is in place for websites to ensure the transaction is secure and free from the casual hacking.

For those that have no access to the internet and are unable to complete payments through a website, there are options with a phone number or through the mail. The individual is able to send a money order or check with postal mail. A confirmation is much slower through these means. However, if the payment is accomplished through the phone, a confirmation number is provided at the time of the transaction. The plan itself should reflect what is possible by the individual or business owner. To ensure the monies are received, the IRS may work and negotiate with the person so that the fees are finalized.

Other Options

When an immediate payment is not possible, the individual may be able to acquire loans to supply the necessary taxes. It is recommended that all possible payments are provided before seeking additional assistance. Financing the rest of the tax liability through a loan may be possible through a home equity loan. If the taxes are owed by a business, the owner may pay through a commercial credit card. Small business loans are possible when the owner qualifies for these to ensure the tax amounts are paid. Direct withdrawal and other online options may also be applicable when using a loan service.

Payment Extension

Some individuals or business owners are able to extend payments for taxes for up to 120 days after they are originally due. This is only when the person or company has become eligible, and the amount is due in full at the new deadline. No fees are added, but interest and other penalties may increase the original amount due until the entire amount has been provided to the IRS. The Online Payment Agreement option is often possible through the extension program, and could be applied online or over the phone for individuals and businesses.

Tax Lawyer for Tax Payments

If a person or company owes taxes to the federal government, it is crucial that the amount has been provided at some point. Even if the IRS must be contacted repeatedly, there are options available to satisfy the payment, and legal assistance may ensure the clientís rights are protected during the plans or programs.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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