Are you one of those who are quickly approaching the deadline to file your taxes on April 18th? Don’t panic because you are not the only one. If you are avoiding filing your taxes based on not being able to pay the full amount you owe, you may want to rethink your strategy.
For many people, being your own boss is a great freedom. That freedom does however come with added responsibilities. Responsibilities such as having to pay your own taxes, which can often tend to be overwhelming.
Failing to pay quarterly estimates can lead to a large tax bill come April and potential fines. For new business owners having money in the bank throughout the year may seem great, but the taxable amount on your profits adds up. Preparing and filing quarterly estimates are some of the planning services we help small business owners with throughout the year. This helps a business owner plan throughout the year to avoid paying a large lump sum tax bill in April.
If you end up with a large amount money to pay, there are some things to consider. Filing your taxes on time can save you from having to potentially pay a failure to pay penalty. Here are a few tips for those who aren’t able to pay their full taxes by the April 18th deadline!
- File on time and pay as much as possible. You have the ability to pay by phone, online, check or money order, or even with your mobile device using the IRS2go app.
- Get a loan or use a credit card to pay the taxes. While your credit card and loans both come with interest, look at how much interest you would pay versus the possible penalties you could incur.
- Payment plan. Don’t wait for the IRS to contact you to set up a payment plan. The best method is to seek out the plan that works best for you. This can be done by going to the IRS.gov page and selecting online payment agreement tool. You can also file form 9465, Installment Agreement Request, with your tax return.
- Don’t ignore a bill! If you choose to ignore a bill from the IRS, they may take collection action. If you are suffering from financial hardship, grab the bull by the horns, contact the IRS and they will help to discuss your options!
The best practice is to file on time. By paying as much as possible on the April 18, 2017 deadline, you reduce the amount of interest and penalties you could face. To find our more information you can contact our office or visit the IRS website at www.irs.gov.