Oh crap. You just found out you are going to owe an arm and a maybe a leg to Uncle Sam this year. And April 15 is just a few days away.
Do you have any clue how you’re going to come up with the money? What if you just don’t have it?
First of all, if you are getting this surprise, you either have the wrong accountant, or you are not giving your accountant enough information throughout the year to be much of a help to you. Be proactive about this stuff, and then find an accountant who is also proactive enough to hold you accountable (pun intended).
Here’s is what the IRS recommends if you need more time to pay:
- File On Time! People who owe taxes but can’t pay the full amount owed by the April deadline should still file their return on time and pay as much as they can to avoid penalties and interest. If you can’t pay the full amount, you should contact the IRS to ask about alternative payment options. Late-filing penalties are worse than late payment penalties, so at a minimum, file that tax return.
- Additional Time to Pay. Based on your circumstances, you may be granted a short additional time to pay your tax in full. A brief additional amount of time to pay can be requested through the Online Payment Agreement application at IRS.gov or by calling 800-829-1040. Taxpayers who request and are granted an additional 30 to 120 days to pay the tax in full generally will pay less in penalties and interest than if the debt were repaid through an installment agreement over a greater period of time.
- Installment Agreement. You can apply for an IRS installment agreement using the Web-based Online Payment Agreement application on IRS.gov. This Web-based application allows taxpayers who owe $25,000 or less in combined tax, penalties and interest to self-qualify, apply for, and receive immediate notification of approval. You may also complete and submit a Form 9465, make your request in writing, or call 1-800-829-1040 to make your request. For balances over $25,000, you are required to complete a financial statement to determine the monthly payment amount for an installment plan. For more complete information see Tax Topic 202, Tax Payment Options on http://www.irs.gov./
- Pay by Credit Card or Debit Card. You can charge your taxes on your American Express, MasterCard, Visa or Discover credit cards. Additionally, you can pay by using your debit card. However, the debit card must be a Visa Consumer Debit Card, or a NYCE, Pulse or Star Debit Card. To pay by credit card or debit card, contact one of the service providers at its telephone number or Web site listed below and follow the instructions. There is no IRS fee for credit or debit card payments, but the processing companies charge a convenience fee or flat fee. If you are paying by credit card, the service providers charge a convenience fee based on the amount you are paying. If you are paying by debit card, the service providers charge a flat fee of $3.89 to $3.95. Do not add the convenience fee or flat fee to your tax payment.
The processing companies are:
Official Payments Corporation To pay by debit or credit card: 888-UPAY-TAX (888-872-9829) www.officialpayments.com/fed
Link2Gov Corporation To pay by debit or credit card: 888-PAY-1040 (888-729-1040) www.pay1040.com
RBS WorldPay, Inc. To pay by debit or credit card: 888-9PAY-TAX (888-972-9829) www.payUSAtax.com
For more information about filing and paying your taxes, visit http://www.IRS.gov and choose 1040 Central or refer to the Form 1040 Instructions or IRS Publication 17, Your Federal Income Tax. You can download forms and publications at http://www.IRS.gov or request a free copy by calling 800-TAX-FORM (800-829-3676).