CPA Jamie Block of the New York State Society of CPAs discussed what to do if you can’t pay your tax bill Monday on News 8 at Sunrise.
“The first thing I recommend to people is to make sure you file your tax return when it’s due so you can avoid another penalty failure to file when it’s due,” said Block. “So, first off file that return, second, pay as much of that tax with the return as you can.”
Block explained some options if you don’t have cash on hand to pay what you owe. “The first thing you can do is look at some alternative sources of money, such as getting a loan, credit cards even, we hate to use those because of the interest but it might be better off to use those instead of having a penalty and interest from the IRS,” she said.
The IRS has tools in place to help you if you owe money. “If you go to their website you can go online for a payment agreement,” Block said. “If you have $50,000 or less of taxes that you owe, you can do that as an individual, $25,000 or less of tax due for business, and what they’ll do is debit your bank account or you can send a payment in each month.”
Block explained what to do if your situation doesn’t fit the IRS criteria. “So what you’ll need to do is go online and download the Form 9465 installment payment request as well as the Form 433F which is a collection of information form, and complete those and mail those into the IRS and begin a payment plan that way,” she said.
The key takeaway is don’t ignore any notices from the IRS. “They have the ability to take collection action, so pay as much as you can, make sure you pay that money because you don’t want them putting a lean on your bank accounts, taking your refunds in future years and things of that nature,” said Block.
You can also reach out to a trusted CPA to guide you through the process. For more information, visit the NYSSCPA website, click here.