Evan Vitale

Evan Vitale – Getting Out Of Debt (Part II)

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By Evan Vitale

Let’s continue our series on how to get out of debt by focusing on a major stress point for many people and that is tax debt.

Depending on your situation, you might be past due on paying your federal taxes to the Internal Revenue Service (IRS); state taxes or county and local taxes. In all cases, ignoring tax reminders and past due notices, won’t make the matter go away. The longer you wait to solve the problem, the worse it will be, especially with mounting interest and penalties.

The best thing to do is to pay off – as soon as possible – any past due taxes you owe. Of course, that is easier said than done, especially if you are in a financial crunch. If that’s the case, you should contact the IRS (and any other agency you owe); explain your financial situation and offer to make payments. In most cases, all agencies will be willing to accept a payment plan. However, you should be aware that part of the payment terms is that you must remain current on payments and file and pay all future tax liabilities on time. If you are self-employed, you should be making quarterly payments on time.

In the case of federal taxes, the IRS has information on payment plans and installment agreements. You can read about them here:

https://www.irs.gov/individuals/payment-plans-installment-agreements

According to the IRS, “if you’re financially unable to pay your tax debt immediately, you can make monthly payments through an installment agreement. As long as you pay your tax debt in full, you can reduce or eliminate your payment of penalties or interest, and avoid the fee associated with setting up the agreement.”

Remember, always file your tax returns on time – even if you can’t pay the balance due in full. All tax returns must be filed in order to apply for any payment agreement.

In our next blog, we’ll review how to pay off credit card debt.

Evan Vitale – Did You Miss The Tax Deadline?

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By Evan Vitale

Now that we’ve passed the deadline – Monday, April 18, 2016 – for filing your federal, state and local tax returns, what should you do if you didn’t file or if you asked for an extension?

What are you waiting on?

Not filing your tax returns isn’t going to make the problem going away. The problem is still there and you certain don’t want the Internal Revenue Service to file your tax returns for you, nor do you want to get a letter in the mail from the IRS.

Some avoid filing tax returns because they know they are going to owe taxes and don’t have the financial ability to write a check at the same time. That’s OK. A lot of people owe taxes. You should still file your returns and get them in the mail ASAP. This way, you’ll have an exact amount that you owe and you can start working out a payment play with the IRS (yes, they will work with you on a payment plan that fits within your budget).

Filing an extension doesn’t delay the due date on the amount of taxes owed. Many people believe an extension means they don’t have to file tax forms nor do they have to pay until October 15. That is false. Filing for an extension means your forms are due by that date. The amount of tax you owe is still due on Monday, April 18, 2016.

By filing for an extension, you are still responsible for any non-filing penalties that have accrued to that date.

If you need help in getting your tax returns completed – even after the deadline AND even if you are not financially able to pay your taxes – you can visit one of many local tax filing offices that pop up all over the place this time of year or call an accountant to help you.

Don’t delay. Even though you missed the deadline, you are still required to get your returns completed and in the mail.