Unable to Pay Taxes Owed to the IRS or State?

Unable to Pay TaxesDidn’t expect to owe taxes this year? Unable to pay the full amount owed before the tax filing deadline (April 17th)? It can happen to anyone due to unforeseen circumstances or missed tax planning opportunities among other reasons. Here are some tips of what you should do if you find yourself in this situation.

 Tip#1 – File Your Tax Return

It is a common myth that by not filing or delaying the filing of your tax return that you will buy yourself more time to come up with payment in the eyes of the taxing authorities. In reality, you may be setting yourself further in the hole because when you finally do get around to filing you will likely be assessed not only interest for late payment but also penalties for the late filing of your return. Keep in mind that interest starts to accrue from the date the payment was due and not the day you filed your return.

Tip #2 – Setup an Installment Agreement

The IRS and many state tax authorities will allow you to pay your tax liability in monthly increments if you setup an installment agreement. While paying on an installment agreement you should not have to worry about the taxing authorities levying or garnishing your assets to collect on your tax debt. See the links below for installment agreement forms for both the IRS and the North Carolina Department of Revenue.

IRS Installment Agreement (Form 9465) – http://www.irs.gov/pub/irs-pdf/f9465.pdf

NCDOR Installment Agreement (RO-1033) – http://www.dornc.com/downloads/ro1033.pdf

Simply Taxes, LLC is a local year-round tax preparation firm with an office located in North Raleigh. Our Raleigh accountants are ready to work one-on-one with you to help maximize your refund opportunity and to provide other tax services in a professional manner.

The information contained within this article is for general guidance only. As such, it should not be used as a substitute for consulting with professional accounting, tax, legal or other competent advisers.

 

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