Monday, February 27, 2012

How Will I Pay My Taxes

It’s tax season again. Many people dread tax season. I dread having to gather all of my receipts and enter the information in the automated tax software I purchased. However, I must admit it is much easier than having to fill out paper forms. This year the deadline for filing your taxes is April 17, 2012. Tax season is even better if you don’t owe taxes. However, if you owe taxes there are several options available.

To make sure you are not violating any tax laws consult a tax lawyer, CPA or certified tax accountant to review your taxes and supporting documentation to make sure that the amount of taxes you owe is correct. Here are 10 ways to pay your taxes.

1. You can setup an installment agreement and pay the amount owed in 3 years.
2. Request an extension and request the maximum extension time of 6 months.
3. Pay by credit card. Pay by credit card if you don’t have the money when the bill is due.
4. Bank Loan. Apply for a bank loan to cover the entire amount of taxes owed. The interest rate is much cheaper than setting up a payment plan with the IRS or a state taxing authority.
5. Use savings. Using savings accounts, savings bonds, stocks, etc. to pay the taxes.
6. Life Insurance. Take out a loan from your life insurance policy to pay the taxes.
7. Borrow. Borrow money from family or friends.
8. Earn extra money. Consider getting a part-time job or work overtime at your existing job to earn money to pay back your taxes.
9. Request an Offer in Compromise. An offer in compromise allows you to settle your for less than the full amount in you meet certain requirements.
10. If you owe taxes from a previous year get caught up on all back taxes first then address any taxes owed for the current year.

The IRS has ten years to collect on back taxes so it is best to work with them to setup a payment plan to back the amount owed. For more information visit the IRS website at

No comments: