- Days left
It's one nightmare everyone hopes to avoid: owing the IRS a lot of money. It's not pretty, but it happens a lot. What do you do? Well the worst thing you can do is to not file a tax return. If you prepare your taxes and find you owe a lot of money, you must still file the return. Not filing can open you up to penalties that you don't need added onto your bill.

You should try to pay as much of the tax bill as you can right away. That will limit the interest and penalties you will get for paying late, and those can add up fast. The IRS does accept credit cards, so that might be one option for paying what you owe. Obviously, you've got to be careful with this option as well, because credit card debt is expensive too.

It's also possible to make an installment plan with the IRS, whereby you pay a certain amount toward what you owe each month. The IRS will be looking for you to stretch and pay off your balance as quickly as possible, so don't expect that they will accept a few dollars a month. Offer to pay as much as you can, as fast as you can. Just get it over with!

The worst thing you can do if you owe money to the IRS is to ignore it. They will get their money from you one way or another, and tactics can include taking money out of your bank account or putting a lien on your home. Contrary to what you may have heard, the IRS is often very reasonable when you're being forthcoming and cooperative.

More Tax Advice

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

Intro to Retirement

Get started early planning for your long term future.

View Course »

How to Buy a Car

How to get the best deal and buy a car with confidence.

View Course »

TurboTax Articles

Will Medicare/Medicaid be Impacted by ACA?

The Affordable Care Act put in place significant tax-related programs that impact Medicare and Medicaid, such as increased Medicare taxes on earned and unearned income for high-wage earners, and Medicaid changes that increase the number of insured individuals. Establishing whether you are affected by the ACA-imposed taxes, or are eligible for certain health programs that fall under the Centers for Medicare and Medicaid Services, is determined by filing your income tax.

Understand and Avoid Health Care Reform Tax Penalties

The Affordable Care Act has brought new options for health care coverage to millions of previously uninsured Americans. While you can still choose not to purchase health insurance, that decision may come at a cost, beginning with the 2014 tax year. Eligible taxpayers who remain without insurance may be required to pay penalties, though there are exemptions for which you may qualify.

What Extra Tax Deductions Should I Make Sure To Take?

The federal government offers tax deductions and credits to reduce taxable income under certain circumstances. There are several that are often overlooked, including deductions for job hunting, caregiver expenses for dependents and children while you work, a credit to reduce taxes for moderate- to low-income earners and the premium tax credit associated with the Affordable Care Act. TurboTax can help determine if you qualify for these credits and deductions.

Add a Comment

*0 / 3000 Character Maximum