What If I Can’t Pay My Taxes?

We all struggle to make ends meet sometimes. Just because it’s tax season doesn’t mean we can just make money appear. Here are some options for you if you find you owe the IRS money and you just don’t have it.

Pay with a Credit Card - The IRS will accept major credit cards for payment. see: Pay Your Taxes with your Credit Card

Apply for a Payment Plan from the IRS -The IRS will set up people in lower income brackets with a payment plan to help spread out your payments and make them more manageable.

Borrow from a Friend or Family Member - This is always an option, but in my experience…money and friends don’t mix.

Borrow on your Mortgage - This is also very dangerous…but if necessary, your home equity can save you from the IRS.

So, if you find yourself in a bind and don’t have credit to help you when times are tough, don’t underestimate the IRS. You should send them as much as you can with your return and discuss options to pay the rest over time. They should be willing to help you as long as you are honest and upfront about your situation.

Tags: credit cards, IRS payment plan, mortgage, owe irs

Last Minute Tax-Savers

Trying to save those last minute dollars on your tax return? With the end of the year rapidly approaching, most of you probably think there is little left you can do . Well guess what? You’re wrong! Here are a few last minute tips to help you save on tax day.


Charity
Thinking of giving money to a charity? By advancing next years charitable donations, or even increasing this year’s gifts, will save you a bundle on your tax return.
70 or older? Did you know that you can take up to $100,000 from your IRA without having to report that amount as gross income? Sweet!
Credit card donations will be deductible this year too, even if you don’t pay the bill until 2009.

Get more for your buck
By making early payments on bills not due until January (such as mortgage), you will also save yourself on your return. The only downside is that you can’t then claim that amount in the next year.

Curb your losses
We know that the market sucks right now. But that is good news for your taxes. Any money you may have lost in the market will off-set the gains you may have made in other areas, ultimately saving you.

Watch your gains
There are few of us this year that have experienced a gain in our portfolios, but if you fall into that category of the lucky, it is important to keep an eye on what you have made. Some of us in the lower tax brackets have to meet a certain amount of gains before you are taxed but the trick is to remain in the same tax bracket. Make too much and you could find yourself having to pay a higher percentage because you have slid up in the economic scale.

So, hey…do what you can to save those precious few dollars. Who knows when the market will come back. Best to be prepared!

Tags: capital gains, charitable donations, charity, credit card donation, deductible, gross income, IRA, mortgage, stock market, stock portfolio, tax bracket, tax-savers