You Owe the IRS a 1040 Balance But Don’t Have the Money to Pay It: Now What?

Form 1040 is one of the most common documents you’ll see as tax season approaches. This form allows you to report both your annual income and deductions so you can determine how much you owe. While many people expect to receive an annual refund upon filing Form 1040, many pay in. What if you owe a balance but can’t pay? A few options are outlined below:

File Your Tax Return

This is not the time to scrap your tax return and hide out — this will attract attention from the IRS and may impact your eligibility for payment plans or other solutions. File your tax return as usual, regardless of your current ability to pay. Keep in mind that a filing extension does not allow you to pay late; it merely grants you an additional six months to obtain the documentation needed to accurately file your tax return.

Consider an Installment Agreement

The IRS offers several payment plans designed to shift the burden from immediate payment to installments paid over the course of several months. You’ll need to pay an application fee, interest on what you owe, and possible penalties — but the consequences of not seeking a payment plan could be far worse.

Get In Touch With the IRS As Soon As Possible

Whether you seek installment payments or some other remedy, it’s critical that you contact the IRS as soon as you become aware of your inability to cover your balance. If you dread interacting with IRS representatives, seek a tax professional to advocate on your behalf.

If you’re worried about your inability to pay your balance after completing IRS Form 1040, seek support from a trusted professional. Call 720-398-6088 today to learn how the Highland Tax Group can help you resolve your tax concerns.