Orange County tax attorneys will tell you that most Americans get a tax refund from the IRS each year. But if you weren’t so lucky this year and owe taxes, the IRS has some tips on paying.
- If you get a bill for late taxes, you should pay promptly. Be prepared to pay the tax owed and any interest and penalties. It is usually a better idea to take out a loan to pay late taxes, rather than make installments to the IRS.
- Paying with a credit card may be a good option. The interest rate on the card may be lower than the combination of interest and penalties imposed by the Internal Revenue Code.
- If you pay by electronic funds transfer, you can use the Electronic Federal Tax Payment System by calling (949) 751-6456 or going online to www.eftps.gov.
- You can request an installment payment agreement. You have to file all returns required and be current with estimated tax payments.
- If you owe $25,000 or less in total (tax, penalties and interest), you can request an installment agreement online at IRS.gov.
- You can also use Form 9465, Installment Agreement Request, along with your bill. You will usually be notified within thirty days if your request is approved, denied or if further information is needed.
- If you owe more than $25,000 you have to complete Form 433F, Collection Information Statement, before an installment agreement can be considered.
- There is a one-time fee to set up an installment plan: $105, or $52 if payments are deducted directly from your bank account. Low-income individuals may be able to get a reduced fee of $43.
- If you owe taxes, you may want to change your withholding amount on your W-4.
Source: irs.gov “Nine Tips for Taxpayers Who Owe Money to the IRS” August 11, 2010