Tax season is stressful for everyone. From gathering tax documents to finding out how much you owe (or hopefully how much you’re receiving), the process can be overwhelming. The hardest part, especially for small business owners, is finding out that you owe more than you can afford. If you’re having trouble finding a way to pay off your tax debt, you can file for a tax payment plan with the IRS.
However, tax payment plans carry penalties, fees, and interest, which makes your overall tax debt even larger. Plus, the IRS may not accept your application. Therefore, it is best to look into all other options before considering a payment plan.
Here’s how to apply for a payment plan with the IRS:
- Before you begin a payment plan with the IRS, make sure to file all required tax returns.
- Next, determine the largest monthly payment you can afford.
- Organize all of the information you will need to apply. For individuals, this includes:
- Bank account
- Employer and tax return information
- Social Security Number or Individual Tax ID number
- Date of birth
- Personal Identification Number (if you don’t have one, you can create one when you apply)
- For businesses this includes:
- Date the business was established
- Business address
- Bank account
- Tax return information
- Apply Online
One more thing. The key to good tax prep is planning. With good, solid planning throughout the year, you can be contributing to your IRA regularly, as well as doing other things to be aware of and offset your potential tax burden. Contact Ten Key so we can help you plan your tax strategy, and you’ll be able to avoid last minute panic, as well as last minute expenses.