Bookkeeping Specialists Tips On What To Do If You Can’t Pay Your Taxes

Bookkeeping Specialists in Miami – We’re well into January, where top new year’s resolutions include being more financially responsible. Tax season is right around the corner too, as Americans begin to get their affairs in order and centralize paperwork for easy tax filing. For some, easy tax filing means to seek out assistance from accountants and bookkeeping specialists in Miami like YBKD bookkeepers.

With seven brackets ranging from 10% to 37$ as of last year, the average tax bracket seems to reside at 24.57% but that mostly applies to people with $84,200 through $160,725 when filing as single taxpayers. Someone who’s unmarried and earns only $35,000 a year for example, with be in the 12% but only on the income that’s over $9,700.

According to the Tax Foundation, the top 50% of taxpayers paid 96.96% of all federal income taxes in 2016. This means that the other 50% only paid 3.04%. Some people can’t pay their taxes, be it due to poor planning or not being able to make ends meet. For this; YBKD bookkeeping specialists are dedicating this blog to sharing tips on what to do if you can’t pay your taxes.

File your taxes on time to avoid penalty

The first tip from your bookkeeping specialist in Miami is to file your tax return on time, since the penalty for filing late adds another 5% to what you owe for each month your return is late. Even if you don’t have enough funds to pay your taxes, you should still send your return by filing deadline.

There are two IRS penalties: one is for filing late, the other is for not paying. These are two different penalties. If you file late penalty can go up to 25% , since you’re paying 5% for each month your return is late. If you can’t pay your taxes in full, you’ll still pay less than the above maximum of 25%. YBKD bookkeeping specialists suggest you pay as much as you can to reduce your balance.

Find different ways to pay your taxes

You may be able to use the equity of your home to pay your taxes, or perhaps pay with a credit card, grab some of your saving, or even get a personal loan. It’s important that you try various ways to pay your taxes. Some people even tap into their IRA, however that’s not really advised since you’ll pay tax penalties on that too.

Installment agreement with the IRS

The YBKD bookkeepers’ other tip on what to do if you can’t pay your taxes is to consider paying your taxes across a few months; in installments. You can request an installment plan through Form 9465 and set up a plan to pay directly through your bank account. You can try to pay it off in two months, or go for a long-term payment plan if it’s more than 120 days which is typically for those who owe less than $50,000.

Bookkeeping specialists in Miami can help with Offer in Compromise for extreme cases

If none of the above work for you, the bookkeeping specialists suggest trying an option called offer in compromise. The IRS will take a lump sum of fixed payments over a few months for a smaller sum than what you owe. You’ll have to complete a personal financial statement (Form 656) and pay $150. Keep in mind, you may not be approved.

If you’re having trouble paying your taxes, seek out the help of YBKD bookkeeping specialists in Miami for regulations with the IRS and the best way for you to move forward, call: 305.868.7620