taxYou have exactly finished preparing your tax return and discover that you owe Uncle Sam a hefty sum, just you can’t afford to pay it. Are you going to jail? Probably not. The realization that you can’t afford to pay your taxes can make you feel uneasy, just don’t worry, there are some actions you can take to remedy the condition.

Send in Your Return

Even if you don’t have plenty money to pay the taxations due, you need to send in your return by the filing deadline. While there is a bit of a penalty for paying late, the penalty for filing late is much more severe. So, no matter what the condition is, file your taxations by the deadline.

Try to get the money

Whether you owe $10 or $10,000, the first thing you should do is try to get possible sources to receive this cash. Consider the options available to you such as equity in your home, credit cards, savings, or cashing out paid time off at work. There are a lot of sources of potential cash, just numerous may closing up costing even more numerous in additional interest.

If You Just need a Little Time

While it is greatest to pay the taxations you owe in full and on time, there are times when all you need is to get your next paycheck or wait a few weeks until the cash is available. If you filed your taxations on time, the IRS will post you a letter in the mail stating how much you owe plus any additional interest.

If you know you’ll have the money shortly after the filing deadline it may make sense just now to wait until they send you the invoice and pay it then, as the interest you pay will be relatively low compared to financing the cash with another source. This certainly shouldn’t be a long term answer and your destination should be to pay the IRS as soon as possible.

Consider an Installment Plan

The government, just like anyone else, would rather get the cash over a period of time as opposed to not at all, so they do have an installment plan available when you can’t pay in complete. To request an installment plan, you should use Form 9465. You can even set this plan up to do a direct debit from a bank account to make the process even easier.

If Even an Installment Plan Won’t Work

So, you can’t find the cash and you can’t even get on an installment plan, what are your alternatives? A final alternative offered by the IRS is called an Offer in Compromise. Keep in mind, this is only for bad circumstances.