For some, filing taxes means a decent tax refund check will be coming in the mail. For other Americans, tax season means tax debt.
If you know you will owe money on your taxes this year, do not put off filing them. While it might be tempting to put off repaying the debt or just not filing all together, you will only make matters worse if you file late. The IRS charges up to 25 percent penalty fees for filing late.
If you can’t repay your IRS tax debt, see if you qualify for settlement options or extensions through the IRS.
IRS Tax Debt Repayment Options
If the IRS does not grant you a settlement or payment extension, there are still other ways to pay back your debt.
The IRS does accept payments from major credit card companies. However, your credit card company might charge interest and possibly a convenience fee.
Another option if you cannot afford to pay back your debt is to take out a personal loan. When using a personal loan to repay your tax debt, be sure the interest rate is low enough so that you don’t get stuck in a long-term debt cycle. Also, if you have poor credit, you might not qualify for a personal loan.
And if you believe you could repay your tax debt if you just had a little more time, then you might be able to use a payment plan through the IRS. This payment plan is available for those who are in good standing with the IRS. You will have to pay a fee to have it set up, as well as interest on the amount you owe.