Steps On Paying Your Taxes
You can pay for your taxes in full or partially and you can pay your tax liability in several ways. For convenience, you can use the IRS e-filing system or by sending a check or a postal money order addressed to the United States Treasury. When filing, make sure that you include your Social Security Number to validate the payment.
If you want to pay full your tax liability, then you can consider financing schemes such as loans, home equity, credit card to name a few. This is important the fact that if you leave any balance, it will incur interest over time. Moreover, you will also be subjected to paying penalties thus if you want to minimize paying more money than you ought to, then pay your taxes on time.
However, if you cannot pay in full, the IRS usually provide a short-term extension so that you can pay the amount within 10 to 120 days.
Understanding Installment Agreements
If you are having a hard time paying your tax in full, then the IRS usually provides solution by giving you a partial payment option.
You can apply for an installment agreement which can be set up in several ways:
– Direct debit from your bank
– Payroll deduction if you are employed
– Regular installment
Once you enter into an installment agreement, you will notice that the amount that you pay is based on your capacity to pay and this amount can be maintained to help you pay your debts. Regarding the direct debit or payroll deduction installment agreement, these provide you the opportunity to make timely payments.
How To Respond To Any Notice Sent By IRS?
It is crucial that you do not ignore any notices sent by IRS. If you decide to make payment arrangements, you can file a Notice of Federal Lien which can take enforced collection action. This also serves as a Levy to offset your tax refund. To understand more, refer to the IRS Topic 201 which is all about “The Collection Process”.
If, however, you cannot make the payment by this time, you can always communicate with the IRS by calling their Toll-free number at 1-800-829-1040.
Now if the IRS finds out that you are incapacitated to pay your debts, the agency will delay the collection until you improve your financial condition. However, it is important that you prepare the necessary information that proves your incapacity to pay. These documents include pay stubs, mortgage statements and so on.
