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Can’t Pay Taxes on Time? Here Are Five Tips

posted Mar 31, 2016, 10:25 PM by Zaher Fallahi

The IRS urges taxpayers to file timely even if they can’t pay what is owed. This saves them from potentially paying a penalty for a late filed return.  Here is what to do if you can’t pay all your taxes by the due date.

 

1. File timely and pay as much as you can. You can pay online, by phone, or by check or money order. Visit IRS.gov for electronic payment options.

 

2. Get a loan or use a credit card to pay your tax. The interest and fees charged by a bank or credit card company may be less than IRS charges as interest and penalties. For credit card options, see IRS.gov.

 

3. Use the Online Payment Agreement tool instead of waiting for IRS to send you a bill before you ask for a payment plan. The best way is to use the Online Payment Agreement tool on IRS.gov. You can also file Form 9465, Installment Agreement Request, with your tax return. You can even set up a direct debit agreement. With this type of payment plan, there is no need to write a check and mail it in each month.

 

4. Don’t ever ignore a tax bill.  The IRS may take collection action against you if you ignore the payment. Always contact the IRS immediately to talk about your options. If you are having financial hardship, the IRS will work with you.

 

5. File to reconcile Advance Payments of the Premium Tax Credit on your health insurance. You must file a tax return and submit Form 8962 to reconcile advance payments of the premium tax credit with the actual premium tax credit to which you are entitled. You will need Form 1095-A from the Marketplace to complete Form 8962. Failure to reconcile your advance payments of the premium tax credit on Form 8962 may make you ineligible to receive future advance payments.

 

Zaher Fallahi, Tax attorney, CPA, advises taxpayers including Americans-living abroad, with their tax preparation, tax planning, IRS representation, undisclosed foreign bank accounts, FBAR, FATCA and foreign trusts. We may be reached at (310) 719-1040 (Los Angeles), (714) 546-4272 (Orange County), or e-mail to:  taxattorney@zfcpa.com

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