What to Do If You Can’t Pay Your Taxes by Tax Day

No one really looks forward to Tax Day.  It is with Schadenfreude that we watch judges threaten celebrities with jail time after the celebrities fail to fulfill their millions of dollars of tax obligations.  Being one of the lucky few who get a tax refund is a double-edged sword.  It means that you are an employee at a job where you don’t earn enough to make ends meet, and you have so little free time, that instead of working gigs to break even, you get a tax refund, which, like other people’s gigs, is not enough to cover the difference between your income and breaking even.  In today’s economy, if your job and your 1099 gigs add up to enough to pay your bills, they certainly don’t add up to enough to pay your bills and your taxes.  That burst of optimism that you felt periodically throughout the year as you paid down your debts turns to trepidation when you calculate how much you will owe in taxes and realize that the combined balances of your checking and savings accounts are not enough to pay it.  If tax season is stressing you out, contact a Plantation debt lawyer.

Pay in Installments, With or Without an Official Installment Agreement

As with any other debt, your tax obligations accrue more interest the later you are in paying them.  Therefore, you will pay less in taxes overall if you consistently make installment payments on your taxes, just like you do with medical bills, credit cards, your car loan, or any other debt.  The IRS offers taxpayers the option of signing an informal agreement to pay their taxes in installments, but even if you do not sign one of these agreements, you can just send the IRS a check each pay period for however much you can afford.  On the memo line, write your Social Security number, your phone number, the tax year you are making a payment toward, and “Form 4868,” which is the same form you used to file for an extension.

Borrow a Debt Consolidation Loan and Use It to Pay Your Taxes

If you can get an affordable debt consolidation loan, then using it to pay your taxes can save you a lot of money on interest payments.  Besides the cost factor, it is less stressful to owe money on a debt consolidation loan than it is to owe money to the IRS.

Discharge Your Other Debts in Bankruptcy to Free Up Funds for Your Tax Obligations

For some people, owing money on a debt consolidation loan sounds like high class worries.  Some of us do not even qualify for a debt consolidation loan because we are so overwhelmed with our other debts.  If this sounds like your situation, it may be a good idea to file for bankruptcy protection.  You can discharge medical bills, credit card debt, and other consumer debts to free up funds to pay non-dischargeable obligations like taxes and child support.

Work With a Debt Lawyer About Coping With Tax Debt

A South Florida debt lawyer can help you strategize so that you can pay off your tax debts as quickly as possible.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.

Source:

finance.yahoo.com/personal-finance/what-if-i-cant-pay-my-taxes-215416984.html