Five Tips For Taxpayers With Back Tax

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If you owe the IRS back taxes, you may feel hopeless about ever attaining tax resolution. There is hope to be had, however, and here are five tips to help you through your time of tax troubles.

  1. If you get a tax bill for past due payments, it is best to pay the full amount immediately, whether you can afford to pay out of pocket, or you need to take a loan to pay. The damage to your credit, and IRS fees and interest will amount to much more than the amount of interest you will accrue on a loan.
  1. If you have special circumstances, you may be eligible for additional time to make your payment. To find out if you can get more time to pay off your back taxes, call 800-829-1040 to speak to an IRS agent, or hire a tax attorney to help you navigate the system more successfully.
  1. If you are unable to pay your liability in full, you can request an installment agreement from the IRS, which allows you to pay monthly installments, instead of one lump sum. Seek advice from an attorney to see this if outcome is possible in your situation.
  1. You may want to pay your bill with a credit card, if you are unable to pay in cash, since the interest rate on a majority of credit cards is lower than the interest rate for back taxes, due to the IRS.
  1. Consider paying your funds by Electronic Funds Transfer, if you are concerned about data or checks getting lost or compromised. This is an option that many taxpayers are unaware is available to them.

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