So you’ve got a tax bill. Well never fear, cuz lots and lots of people have them too. Maybe you didn’t save enough, or you had an unexpected emergency and used the money for something else, maybe you got audited and you owe more? It’s ok, it happens. One of the 2 things we’re guaranteed in life, death, and taxes! I know all to well the stress that owing to the Federal Government can bring. I’ve been there, heck I’m still paying down my debt from my audit last year. Here are some simple tips to get you thru it.
- Don’t Ignore the Bill– First things first, don’t ignore the bill. While many people like to stick their heads in the sand. The IRS will eventually find you. And it won’t be pretty. They’ll access fines and interest to your bill, which will add up. Just contact them and let them know the circumstances, it will go far in their eyes if you’re serious about paying down the debt.
- File On Time and Pay As Much As You Can- This sounds simple, but you’d be surprised how many times people see that they owe money, so they just don’t file at all. Don’t do that. Be on time with your taxes, and if you can’t afford to pay the whole bill, send as much as you can with a note. They will be in touch! Being proactive and timely goes a long way with creditors. Shows your intentions are good and you want to be honorable.
- Get A Loan or Use Credit Cards– While I don’t advocate for this, it’s certainly an option, although not the best one. Some people are so terrified to deal with the IRS that they are more likely to take out more debt to pay this off when there are smarter choices. Use this as a last resort, if at all.
- Ask Parent/Friends For Loans– Again, this wouldn’t be my first choice. I try to make a point to never borrow money from friends, and only reticently borrow from family. While most parents might loan you money without interest, (which is super nice!), often times people are slow and lazy to pay back the parental unit. Which can cause undue stress on all parties. I mean who wants to send their kids to collections??!?
- Use IRS Online Payment Tool- This would be my first choice. The IRS understands that many people have tax debt that they can’t pay back at one time. That’s ok, they’ve already thought that way. They’ve got an installment plan program and even a program where you can settle the debt. The installment program is by far the easiest to get enrolled in and they’re very generous in dealing with what you can afford. The settlement program is very in depth and takes quite a bit of time and detail to figure out. Definitely worth it though, if you’ve got a large debt and have a chunk of money that you’d like to settle it with. Probably not worth the time for smaller debts that can be repaid simply.
- Look for a Side Job– So whenever we’re strapped for cash, we’ve got options, and one of them is to get a second job, or side hustle. There’s plenty of jobs we can do part-time to make extra cash, including things like Uber, become a virtual assistant, or even babysitting or yard work. Put those extra skills and time to work and make some cash. For more ideas on Side Jobs, check out the TOP 50 Side Hustle Jobs
- Sell Off Your Stuff– If you simply don’t have time work another side job, start looking around the house for those things that you no longer need. Electronics, collectibles, antiques, coin collections. There’s plenty of stuff sitting, sometimes in storage, that we simply don’t need or use. For the easiest ways to sell your stuff, check out the 10 Ways to Sell Your Stuff
Not being able to pay your taxes, can be scary and daunting. But never fear, you’re not alone. Plenty of Americans, myself included, have tax repayment plans in place. Being upfront, taking necessary steps, and staying diligent about paying down your debt will go far in the eyes of the IRS. I look at the mistakes I made on my taxes, and subsequent audit as a blessing in disguise. It made me much more knowledgable about my taxes, and I’ve become much better about keeping good records and up to date with my payments. Making mistakes is nothing to be ashamed of, it’s simply a learning curve and a chance to do better. Don’t be afraid to tackle these issues head on, you’ll be much farther ahead in the long run.
