If you’re one of the many Americans who owe money to the IRS this year, don’t panic. You have a few options for how to pay your tax bill even if you don’t have the cash on hand. In this blog post, we’ll discuss five different ways that you can pay your taxes without going into debt. Keep reading to find out more!
1. Pay your taxes with a credit card.
No one likes paying taxes, but it’s a necessary part of being a responsible citizen. If you don’t have the money to pay your tax bill, there are a few ways you can still get it done.
One option is to use a credit card. This can be a good choice if you’re confident you’ll be able to pay off the balance quickly. The IRS accepts all major cards, and you can even earn rewards points on your payment. Just be sure to pay attention to the interest rate on your card so you don’t end up paying more in the long run.
The IRS doesn’t charge a fee for using a credit card, but the processing company might. Be sure to factor that in when you’re deciding whether this is the right option for you.
You can use 0%APR credit cards to pay your taxes, which can help you avoid paying interest if you’re able to pay off the balance before the intro period ends. Just be sure you understand the terms of the card before you apply so there are no surprises.
2. Use an installment agreement to pay off your debt in monthly installments.
Another option for paying your taxes is to set up an installment agreement with the IRS. This allows you to pay off your debt in monthly installments, rather than all at once. The IRS offers several different payment plans, so you can find one that fits your budget.
There is a small fee for setting up an installment agreement, but it can be worth it if you need some time to pay off your tax bill. Just be sure you make your payments on time, as the IRS can revoke your agreement if you default.
If you’re struggling to pay your taxes, an installment agreement might be the best option for you. It’s important to remember that you’ll still owe interest and penalties on your unpaid taxes, so try to pay them off as quickly as possible.
3. Ask for an extension on paying your tax bill.
Another option for paying your taxes is to ask for an extension on paying your bill. This gives you an extra six months to come up with the money. Keep in mind that you will still have to pay interest and penalties on your unpaid taxes, even if you get an extension.
4. Apply for an offer in compromise.
Another option for paying your taxes is to apply for an offer in compromise. This allows you to pay off your debt for less than the full amount owed. Keep in mind that there is a lot of paperwork involved in applying for this type of agreement, and not everyone will be approved.
You have to pay a $205 application fee and an initial payment toward your tax bill when you apply for an offer in compromise. The IRS will also require you to submit a financial statement and other documentation to prove that you can’t pay your full tax bill.
If you’re struggling to pay your taxes, an offer of compromise might be the best option for you. Just be sure to do your research and understand the process before you apply.
Keep in mind, that the IRS rejects most offers in compromise, so it’s important to understand the process and have a strong case before you apply.
4. Use a loan to pay your tax bill
Another option for paying your taxes is to take out a loan. This can be a good option if you’re confident you’ll be able to pay the loan back quickly. There are a few different lenders who offer loans specifically for paying taxes, so be sure to shop around to find the best deal.
Just be sure you factor in the interest rate when you’re considering this option. You don’t want to end up paying more in interest than you would have if you’d just paid your tax bill on time.
If you’re struggling to pay your taxes, a loan might be the best option for you. Just be sure to shop around and find the best deal before you commit.
5. Ask for a currently not collectible status
If you can’t afford to pay your taxes, you might be able to get a currently not collectible status. This means the IRS won’t try to collect the debt from you for a certain amount of time. To qualify for this status, you have to prove that you can’t afford to pay your taxes and that you have no assets that could be used to pay your debt.
If you’re struggling to pay your taxes, a currently not collectible status might be the best option for you. Just be sure to understand the process and have all the necessary documentation before you apply.
Keep in mind that the IRS can still try to collect your debt even if you have a currently not collectible status. They can do this by garnishing your wages or putting a lien on your property.
6. Borrow money from family or friends.
If you’re struggling to pay your taxes, borrowing money from family or friends might be the best option for you. Just be sure to come up with a payment plan and make sure you repay the money as quickly as possible. Otherwise, you could damage your relationship with your loved ones.
7. Sell assets like cars, jewelry, or furniture to raise money.
Selling assets is another option for paying your taxes. This can be a good option if you have assets that you don’t need or use anymore. Just be sure to factor in any fees or taxes associated with selling your assets.
If you’re struggling to pay your taxes, there are a few different options available to you. Just be sure to do your research and understand the process before you commit.
Which option is best for you will depend on your individual circumstances. If you need help deciding, speak with a tax professional or financial advisor. They can help you understand your options and make the best decision for your situation.
No matter what option you choose, the important thing is to take action and get started on resolving your tax debt. The sooner you do, the better off you’ll be.
Do you have any tips for paying taxes? Share them in the comments below!
Thanks for reading
- Shivani is an expert in personal finance who motivates and educates readers to make the most of their financial opportunities. She covers a wide range of topics, from credit cards and banking to travel rewards programs. She has an established presence in the personal finance media industry and has been featured in Prestige Magazine and The My Credit Card Club. Shivani is passionate about understanding money in order to help her readers make responsible and lucrative decisions. From her homebase in New Delhi, Shivani travels the world as a digital nomad, sharing her knowledge and experiences with those seeking to understand their finances better.
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