Help is available
First and foremost, you aren’t the first person to be surprised by a high tax bill. You also aren’t the only person to come up short of money at tax time.
If you do find yourself short on cash when it comes time to file your tax return, there are two different ways to handle your situation.
If you can pay within a short period of time (generally within a few months), go ahead and file your return on time. After you file, be sure to send the money as quickly as possible.
If you know you can’t come up with the money anytime soon, you should consider applying for an installment agreement with the IRS. These type of plans offer you the opportunity to pay down your tax debt over a longer period of time rather than in one large payment.
Plus, the Failure to Pay penalty the IRS charges those who don’t pay is reduced by half if you’re enrolled in a plan.
The good news is there are many ways to prevent this from happening the next time you file. Click here for tips on how to reduce your taxes owed and for more information on the installment plans.