Don’t let tax debt bring you down

| Apr 12, 2019 | Back Taxes or Tax Debt

Every year, there are those in Connecticut who, come tax season, learn that they owe the Internal Revenue Service a significant chunk of change. If they cannot pay it, some may choose to let it slide — which can have significant consequences and ultimately end up increasing their tax debt. The best thing to do when unable to pay taxes is to make a plan of attack and stick to it.

There are actually a number of ways to address one’s inability to pay his or her tax debt. Some are better than others. A few options include:

  • Use a credit card to pay the debt
  • Take out a personal loan from a bank, family or friend
  • File for an extension
  • Ask the IRS for a payment plan
  • Apply for an Offer in Compromise

Putting the debt on a credit card is not the best choice as credit card interest rates can be ridiculous, and the IRS will charge a processing fee, only increasing how much one owes. A personal loan is an okay choice if the loan has low-interest rates or, better yet, is interest free. The last three options on the list are all good options, as they show the IRS wants one to pay but can offer help if needed.

Those with tax debt often choose to forgo filing taxes in the future. This can end up costing them more than if they file and fail to pay. Few people believe that the IRS is willing to work with them when they cannot pay, but that simply is not true. Connecticut residents who need assistance working with the IRS to find an affordable solution to their tax debt problems can turn to an experienced tax attorney for guidance and help talking to the IRS.

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