So, you have filed your tax return and there is no way that you are going to be able to pay everything you owe. Okay, calm down and take a few deep breaths. Believe it or not, you are far from being the only one who is going to be faced with this scenario this year. Whether it is from a huge investment payoff, incorrect W-4 exemptions, or plain flat out squandering of savings, you may have got yourself into this mess, but you can certainly get yourself out. Let’s have a little question and answer session between the two of us, and see what we can come up with.

“Okay, I’ve filed my taxes, now what am I supposed to do?”
Well, I hear the child slavery market and American mail order bride business is going rather well these days… but if neither of these is an option, then we are going to have to get there the hard way. One of the easiest methods is to obtain the money through a bank loan.

“What about the interest rates?”
Unfortunately, the IRS charges more interest and penalties than most any bank, so it is actually better to go with the bank loan. One of the newest hip moves today (although I almost hesitate to say), is to pay off your entire balance with a credit card. Better yet if you have an air miles program, or cash back feature, you may stand to earn a slight bonus from the whole experience after all. Just make sure that you will have the eventual funds in the near future; the last thing you need is to run up a credit card bill too!

“I won’t use a credit card!”
Okay, I can understand that. Sometimes it is not such a bad idea to simply pay the IRS late. And by this, I mean to pay them as much as you possibly can up front and then send a portion of the remainder of your balance each time you receive a notice of payment due. You can also request an installment agreement (form 9465) and pay down your owed amount with a designated payment plan. It will be you who is designating how much you can afford per month, so make sure to divide your total taxes due with the number of months until next tax year’s end. You certainly do not need a double whammy when the next years return rolls around the corner!

*Photo curtesy of Woodsy at Stock.xchng