Many people were hit hard by the recession. There has been a lot of talk,
articles and more about those who became full-timers, not so much because they
wanted to, but because the economy forced them to.
If you’re in that tough boat and owe tax, April 15 is close at hand (and if
you’re reading this after April 15, don’t give up read on).
If you owe Uncle Sam a chunk of change for income tax, but can't afford to
pay the full amount by the April 15, 2010 deadline, DO NOT play Ostrich. Hiding
your head in the sand will prove financially devastating. What do you do? What
you don’t do is ignore it. The problem won’t go away, it will get worse.
However difficult or unpleasant, or seemingly impossible to resolve, you’ll end
up better off confronting it.
File your income tax returns on time. If you’re reading this after the
filing deadline and didn’t file, FILE now. The sooner the better.
Pay as much as you can, whatever you can. This will show a good faith
effort. It will also reduce penalties and interest.
Don’t assume that it is the big bad IRS after you. Anger or fear won’t
solve your tax issue. Confronting it will. That attitude breeds fear and
helps some in the tax industry make more money. Most folks at the IRS are
just doing their job and they often will try to help where they can. If an
IRS agent refuses to cut you slack on an interest charge, the law may not
permit them to.
Request more time to pay the tax when you file. Explain your specific
circumstances and why you need time.
Request an “installment agreement” from the IRS. If you don’t owe more
than $25,000 in tax, interest and penalties you might qualify for a payout
over time. Start by checking out the “Online Payment Agreement” (OPA) at
www.irs.gov/individuals/article/0,,id=149373,00.html before spending a
bundle on a consultant.
Consider whether you can, or should, charge your tax bill on a credit or
See IRS Tax Tip 2010-68 on the IRS website for more info.
Don’t forget the state tax issues.
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