What to Do If you Can’t Afford to Pay your taxes?
Paying taxes can be a significant financial burden for many people, especially if you’re struggling to make ends meet. If you find yourself unable to pay your taxes, it’s important to take action right away to avoid additional penalties and interest. Here are some steps you can take if you can’t afford to pay your taxes:
- File your tax return on time: Even if you can’t pay your taxes, it’s important to file your tax return on time to avoid additional penalties. If you file for an extension, you’ll still need to pay your taxes by the extended deadline.
- Apply for a payment plan: The IRS offers several payment plans to help taxpayers who can’t pay their taxes in full. One option is the short-term payment plan, which allows you to pay your taxes in full within 120 days. Another option is the long-term payment plan, which allows you to pay your taxes over an extended period of time, usually up to 72 months.
- Consider an Offer in Compromise: An Offer in Compromise is a settlement agreement between the taxpayer and the IRS, which allows you to settle your tax debt for less than the full amount owed. This option is generally only available to taxpayers who can’t pay their taxes in full and don’t have the ability to pay in the future.
- Seek professional help: If you’re unable to pay your taxes, it’s important to seek professional help. A tax professional can help you understand your options, evaluate your financial situation and help you navigate the process of resolving your tax debt.
- Be aware of Scammers: Be aware of scammers who might take advantage of your situation by posing as the IRS or a tax professional. The IRS will never call or email you asking for personal or financial information. If you receive a call or email that seems suspicious, hang up or delete the email.
- Look into hardship programs: Some states offer hardship programs that can help taxpayers who are unable to pay their taxes. These programs may include installment agreements, tax reductions, or even forgiveness of taxes owed in certain circumstances.
In conclusion, if you’re unable to pay your taxes, it’s important to take action right away to avoid additional penalties and interest. The IRS offers several options for taxpayers who can’t pay their taxes in full, including payment plans, an Offer in Compromise, and professional help. Additionally, be aware of scammers and look into hardship programs that may be available to you in your state. With the right steps, you can get back on track and resolve your tax debt.