Strapped for Cash? You Have Several Options for Making Federal Income Tax Payments to the IRS
Many taxpayers eagerly await tax refunds every year, a bonus, if you will, for paying into the system all year long. Some taxpayers, however, face the issue of writing a large check every year. Those who are self-employed know that story all too well.
Did you know that the Internal Revenue Service (IRS) has ways for those consumers strapped for cash to make their payments? There are three very simple options consumers can use to get a little more leeway with the IRS and to extend their dollars for a few extra months.
The first option is asking for additional time to pay. Depending upon your individual circumstances, you may be granted additional time to pay your tax in full. You may apply by visiting the IRS website or by calling 800-829-1040. You may be granted an additional 60-120 days and will generally pay less penalties and interest than if the debt were settled through installment agreements or by credit card.
Speaking of installment agreements, you can set one up with the IRS to pay over time. If you owe $25,000 or less in combined taxes, penalties and interest, you can apply on the Internal Revenue Service website with instant notification of approval for monthly payments. For larger balances, you may be required to complete a financial statement.
Lastly, you may pay by credit or debit card. The IRS charges a fee based upon the amount you are charging. Please be mindful of your interest charges when deciding to use a credit card and take note of additional fees assessed for use of this convenience.
Regardless of whether or not you will be able to pay your taxes in full immediately or down the road, all consumers should file by the April 18, 2012 deadline to avoid additional interest and penalties.