- 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

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

Banking Services 101

Understand your bank's services, and how to get the most from them

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.

8 Things You Think Are Tax Deductible That Aren't

There?s a fine line between looking to save money on your taxes and taking deductions that will raise eyebrows at the Internal Revenue Service. Some taxpayers are tripped up by expenses that they assume are tax deductions, but don?t qualify under IRS guidelines. Here are a dozen items that can lead to unpleasant surprises in case of an audit.

Essential Tax Forms for the Affordable Care Act

The Affordable Care Act (ACA), also referred to as Obamacare, affects how millions of Americans will prepare their taxes in the new year. The law now includes penalties for all who haven?t obtained health insurance -- and those penalties are expected to be paid at tax time. The ACA also provides tax credits to help people pay for insurance, and you can claim those credits when you file your taxes. The Internal Revenue Service (IRS) has introduced a number of tax forms to accommodate the ACA.

How to Determine if You Have Minimum Essential Coverage (MEC)

The Affordable Care Act, also known as Obamacare, requires most Americans to have health insurance that meets a government standard known as "minimum essential coverage," or MEC. Whether your insurance qualifies as MEC depends not on the plan itself, but on how you obtained your coverage.

What are 1095 Tax Forms for Health Care?

In 2014 the Affordable Health Care Act, also known as Obamacare, introduced three new tax forms relevant to individuals, employers and health insurance providers. They are forms 1095-A, 1095-B and 1095-C. These forms help determine if you need to comply with the new shared responsibility payment, the fee you might have to pay if you don't have health insurance. For individuals who bought insurance through the health care marketplace, this information will help to determine whether you are able to receive an additional premium tax credit or have to pay some back.

Add a Comment

*0 / 3000 Character Maximum