Navigating Tax Challenges:
What to do When You Can't Pay Your Tax Bill

March 19, 2024

Facing the reality of owing taxes you can't afford can be daunting, but fear not – the IRS offers options to help you meet your federal tax obligations. At Grants Pass Tax Service, we understand the challenges you might encounter, and we're here to guide you through the process.

Filing Your Tax Return and Paying What You Can

If you find yourself unable to pay the full amount of taxes owed, the key is not to panic. File your tax return on time and pay as much as you can with it. Timely filing can help minimize interest and penalty charges. Remember, even if you can't meet the filing deadline, you can request an extension of time to file, but taxes must still be paid by the original due date.

Exploring Payment Options

For those unable to pay in full, the IRS provides various payment options. The IRS may offer relief such as a short-term extension, an installment agreement, an offer in compromise, or temporarily delaying collection. The Online Payment Agreement application on IRS.gov simplifies the process for requesting an installment agreement, making it easier for you to manage your payments. 

 

Electronic Payment Options 

The IRS offers electronic payment options, allowing you to make full or partial payments with your tax return. Taxpayers who e-file can use the electronic funds withdrawal option, and there are numerous free online, phone, and mobile device payment options including Direct Pay, debit or credit card, or EFTPS. Visit IRS.gov/payments to explore the convenient ways to pay your federal taxes throughout the year, ensuring timely payments and avoiding interest and penalty charges.

 

How to Avoid a Large Tax Bill 

Avoid a substantial tax bill by following the pay-as-you-go system. Accurately computing and adjusting tax withholdings from wages can prevent payment penalties for taxpayers. Partnering with a tax professional ensures you accurately manage your tax payments, whether through withholding or estimated payments, crucial for individuals with multiple income sources or self-employment.

 

Don't let tax challenges overwhelm you! Plan ahead to avoid owing taxes with the help of a tax professional.  At Grants Pass Tax Service, we can guide you through tax planning and ensure a smoother financial journey. Contact us today for personalized advice!

Image by Micheile Henderson