Things You'll Need:
- Your tax return
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Step 1
If you have finished preparing your tax return and you owe money to the IRS, there are several things you can do to ease your dilemma. The first is to simply file an extension, which gives you until October 15 to pay your tax bill. You will pay a small penalty of one-half of 1 percent of the amount you owe each month after April, plus interest. But whatever you do, DO NOT FAIL TO FILE YOUR EXTENSION OR AT LEAST YOUR ACTUAL RETURN. If you don't file at all, then the penalty becomes a whopping 5 PERCENT of your balance due each month until it reaches 25 percent!
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Step 2
Go back over your return and make absolutely certain that there are no more deductions or credits that you are entitled to. It may behoove you to have a tax professional look over your return if you prepared it yourself. It might be a good idea to make a traditional IRA contribution as well, because this will add to your above-the-line deductions for the previous year.
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Step 3
If you have no more deductions available and will not have the money within the extension deadline, then you will need to establish a monthly payment plan with the IRS. This is fairly easy to do. Simply complete IRS form 9465 or else just go online to the IRS website and set up a payment plan directly. There will be a plan start-up cost of approximately $50 to $100 to do this.
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Step 4
If it is possible, just pay the tax in one lump sum if you have the cash available to do so. This is by far the simplest (but usually the most difficult) solution to the problem. Of course, most people who read this article are probably doing so because this is not an option for them.
Comments
writetruth said
on 3/15/2008 Great Information~~