What If You Weren’t Prepared to Owe the IRS Money This Year — And Now You Do?

This is not shaping up to be an easy year for American taxpayers. According to a recent IRS report, refunds are down nearly 17 percent. This has come as a shock to many taxpayers, some of whom expected hundreds, even thousands of dollars more than they’ve actually received. Still others must pay in this year. If you count yourself among this unfortunate bunch and aren’t financially prepared, you’re in for some tough times. Follow these suggestions to make the most of this difficult situation:

File Your Return

Avoiding your tax issues will not make them go away. Even if you can’t pay right now, you should file your tax return on time, as you would any other year. Your failure to file could lead to significant penalties, especially if you also fail to pay on time.

Arrange for an Installment Agreement

It’s in the best interest of the IRS to get your money somehow, even if it’s not on time. Hence, the availability of installment agreements. With the right payment plan, you can tackle your tax debt little by little while keeping penalties and interest to a minimum.

Seek Currently Not Collectible Status

If the IRS determines that you cannot possibly afford to pay down both your tax bill and handle general living expenses, you may qualify for currently not collectible (CNC) status. While your account is deemed CNC, you will not be hit with levies. The IRS may still assess interest, but this option may prove helpful if you need to buy time.

If you’re still struggling to make sense of your options, don’t hesitate to get in touch with the Highland Tax Group. We offer compassionate guidance and a range of services designed to help you through the most challenging tax situations.