Can’t Afford to Pay Taxes? Here’s What You Can Do!

Can't afford to pay taxes? It’s a tricky position to be in, and this can leave many of us panicking about our next returns. However, if you’ve been worried about this, don’t worry!

You can take steps if you can't afford to pay taxes. They’re not that hard, and these could help you avoid the consequences of missing the deadline.

Can't Afford To Pay Taxes? Here Are 4 Options To Consider

If you’re struggling with the dreaded tax bill, there are options you can try to make sure they get paid. Keeping these in mind could help you find the most effective solutions.

1. File, But Delay Payment

One of the simplest options here is simply to file your return but delay making the payment. Of course, this isn’t ideal. You could accrue a lot of extra fees doing it this way! However, it is an option.

The most important thing to remember here is: to make sure you file! Even if you can’t afford the tax right now, it’s vital that you file. And, ideally, try to make a partial payment. While you’ll still get penalties, they may be less with less outstanding tax.

2. Apply, For An Installment Agreement

If you have enough funds to pay some of the tax now, you could apply for an installment agreement. However, it’s worth keeping in mind that these are only available for filed returns. You’ll also need to be able to afford some of your taxes now.

You likely won’t be able to reduce the tax payment once you’ve agreed to the terms. So, an installment agreement is only good if you know you’ll have enough income in the future to meet the minimum payments.

And, they’re hard to keep on top of. It’s easy to get stuck in a vicious cycle of spending your current profits on last year’s tax. This may mean you can’t save any money for next year’s taxes.

3. Look At Offer In Compromise

On the surface, an offer of compromise sounds brilliant! With this scheme, you effectively write off part of the value.

However, it’s not an easy option to arrange; often, the IRS will be reluctant to allow you to use this option. It actively encourages people and businesses to consider other routes first. So, while it may be worth trying this option, don’t count on it. Others avenues may have better odds of approval.

4. Consider Installment Loans

If your tax bill is higher than you’d hoped, and all other options don’t seem to fit, you could take out installment loans. These are designed to offer a simple way to repay your borrowed money. As such, rather than having to pay back the entire loan at once, you instead repay this over time. This makes each payment smaller and more affordable, having less of an impact on your finances accordingly.

How Do I Apply For An Installment Loan?

If you’d like to apply for an installment loan as part of your tax-management strategy, you need to choose a reputed and trusted lender first and foremost.

Indeed, not all lenders are created equal. Many are simply out to scam you out of your hard-earned cash or personal details. Always choose a reputable team like Idaho Title Loans, Inc., to be safe.

To apply for a loan with Idaho Title Loans, Inc., simply complete the online form. Once this is done, you’ll receive a call directly from your designated loan representative. They’ll be able to let you know the details of an installment loan and the approval process.

Then, simply head down to your local store with the necessary paperwork. If you are approved, you can receive your funds on the same day or the following business day. The process is fast.

What Happens If I Don’t Pay My Taxes On Time?

If you still can't afford to pay taxes and miss the deadline, don’t fret. Late payments are allowed, but you will incur a penalty fee. This is 5% of your unpaid tax liability per month.

The maximum cap here is 25%. So, if you owed taxes of $5,000, you’d pay up to $1,250 extra in penalties. However, there’s a catch. The punishments can be more severe if you actively attempt to evade paying. In this scenario, you could be fined up to $250,000 and/or five years in prison.

In any case, it’s often not worth going late on your payment. So, if you think you’re going to struggle, looking at your options early could help.

Learn More About Installment Loans

If you think you can't afford to pay taxes this year, don’t panic. While this can be a scary situation to be in, there are options you can try. And while these might not be ideal solutions, they can be a good option to tide you over in the interim!

If you would like more information about your fast cash option installment loan to cover your taxes, reach out to Idaho Title Loans, Inc. by completing the online loan request now. 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.