Americans have really struggled financially this year, and now the extension people filed for is about to end. That means any taxes you owe the IRS are due this month.
If you owe taxes, then the deadline to pay them is October 17. You should pay them as soon as you possibly can.
So far about 19 million Americans have filed their tax returns, but the penalties for not paying taxes to the IRS have risen since April 18, according to Marca.
How to handle taxes owed the IRS if you cannot afford them
There are a few options available for those struggling to pay their taxes right now.
First, there is the option to apply for an installment agreement. This is a common option for those finding themselves in debt and unable to pay their taxes in full and on time.
An installment plan with the IRS is defined as a long-term monthly payment plan between the person owing taxes and the IRS. Those that owe under $50,000 can apply to create one of these plans online.
Another option is the offer in compromise, which helps you settle for less. This will have you settle your owed taxes for less than what you actually owe.
Being approved for an offer in compromise will help someone significantly lower the amount of taxes they actually have due. It’s important to still try to remain current on your tax bills until you can be approved for some sort of plan.
Finally, a third option for knocking your tax debt down would be applying for penalty relief. Something happens when you fail to pay your tax bill on time. You’re given a penalty on top of the taxes already owed.
This is an option for Americans who owe taxes but were unable to pay them on time due to circumstances beyond their control. One example of this would be a business operating for its first year and accidentally missing a deadline. If their accountant is behind and it’s not the company’s fault at all, they may be approved for a waiver of penalties. By proving you missed the deadline and the situation was entirely out of your control, you may be approved.
New guidance changes student loan forgiveness; two types of student loans aren’t eligible anymore
Samantha edits our personal finance and consumer news section. Have a question or lead? Send it to [email protected].