The Internal Revenue Service offers some advice to taxpayers who owe tax money, but it may not be the right advice for your situation. At the end of the day, the IRS is in the business of collecting tax money, not giving away free financial advice. While some of the agency’s suggestions make sense, seeking individual assistance with tax problems is probably the best thing you can do.
For example, the IRS recommends that you get a loan or use a credit card to may your tax payment as soon as possible. The agency’s advice also includes all the ways you can pay your taxes — including electronic funds transfer. While it’s definitely better not to owe the IRS money if at all possible, there might be better ways to deal with a tax bill in your particular situation.
The IRS does advise tax payers about various tools, such as installment agreements, that can help you buy time if you can’t pay your total tax bill right away. Many people who owe less than $25,000 will be able to qualify for an installment agreement with the IRS. Some other tools that might be helpful when dealing with tax bills include offers in compromise, innocent spouse relief and negotiations.
Another piece of advice provided by the IRS is that you might want to change your withholdings if you consistently owe money each year. You can lower the amount of dependents on your W4, which means that more taxes will be taken out of your paychecks. While you lose that money on each check, you will be less likely to face a large tax bill at the end of the year.
Whether you are considering an accounting or W4 change or you need to negotiate with the IRS on a delinquent tax bill, professional help may be a boon. Knowledgeable negotiation can help you achieve a successful outcome.
Source: Internal Revenue Service, “Ten Tips for Taxpayers Who Owe Money to the IRS,” accessed July 03, 2015