It is important to pay back your taxes, even if your finances are stopping you.
Here are fives ways to pay, even if you’re short on money.
1. Pay on a credit card
Paying your taxes with a credit card really only helps you short term. If you are already in debt, you don’t want to add on more. If you have the financial security to make a payment, then this could be an option. The IRS accepts all major cards such as American Express, Discover, MasterCard and Visa.
2. Refinance your home
If you are in a financial pinch, you could refinance your home. You can use your equity to resolve any outstanding tax debt.
3. Enroll in an installment agreement
If you won’t be able to pay the whole bill, apply for an installment agreement with the IRS. As long as you make payments, the IRS is pretty flexible with these options. If you owe $50,000 or less you can apply online, or by mail using federal form 9465-FS, Installment Agreement Request. If you owe more than $50,000, complete the federal form 433-F, Collection Information Statement and mail it in to apply.
4. Think about a Offer in Compromise
This option is sometimes referred to as an OIC. You may be able to settle your debt with the IRS for less than your tax bill. The OIC is agreed upon by the IRS if they think the tax payer won’t be able to pay within a reasonable period of time.
5. Request a time extension
If you think you can pay back your taxes, but need more time– ask for an extension. Use the Online Payment Agreement application or call 800-829-1040. You can usually be granted between 60-120 days. Asking for an extension helps avoid paying additional penalties and interest.