Small Business Tax Savings Podcast What Do I Do If I Cannot Pay My Tax Bill? What Options Do I Have To Pay For My Tax Bill?
Are you struggling to pay your tax bill? Don’t panic – there are options! In this episode, we discuss the different ways you can pay your taxes, from having the payment withdrawn with e-filing to using a debit or credit card.
Mike Jesowshek offers advice such as how to create an IRS account and locate preferred vendors for payment processors. He explains what happens if you don’t pay the full amount on time – including interest and penalties, and how to avoid them.
He covers state payment options and shares his tips on where to help if you need it. Get all this helpful information and more in this episode of the Small Business Tax Savings Podcast.
Tune in now and learn more information on how to pay your tax bill and what happens if you don’t have the funds available!
[00:01] Options for Those Who Can Afford to Pay and Those Who Cannot
- Mike provides options to pay the tax bill in full:
- Withdraw with e-filing of tax return
- Pay online via a bank account with an IRS account
- Pay online via a bank account using Direct Pay
- Pay online via debit or credit card
- For those who cannot afford to pay their tax bill:
- Create an IRS account to view balances, payment plans, and more
[06:36] Learn How to Handle Your Tax Bill When You Can't Afford to Pay
- If you can’t afford to pay your tax bill, “Don’t panic, there are options available.”
- Make sure you are still filing your tax return or requesting an extension by the deadline
- Pay as much as you can with a tax return or extension filing to avoid penalties
- Failure to pay penalties
[14:28] Don't Get Stuck in a Tax Penalty Situation
- The interest rate on unpaid taxes is the federal short-term rate, compounded daily
- Options for paying taxes include:
- Borrowing funds
- Short-term payment plan/installment agreement
- Offer in compromise
- Make sure to file a tax return even if unable to pay the full amount
[17:52] Closing Segment
- Check the State’s website for payment plans and penalties/interest rates: https://www.irs.gov/
- Final Words
Key Quotes
“If you have both a failure to file and a failure to pay penalty in the same month, the failure to file penalty is reduced by the amount of the failure to pay penalty for that month.
So, it's going to be a combined penalty of 5% for each month. If after five months you still haven't paid, the failure to file penalty will max out, but the failure to pay penalty continues until those taxes are paid.” – Mike Jesowshek
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast
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To find out more on this topic and many others visit our website at www.TaxSavingsPodcast.com. You can also give us a call at 844-327-9272 or send your questions to us at: Ask@TaxSavingsPodcast.com