I Cannot Pay My Taxes, HELP!

English: Debit Card (Photo credit: Wikipedia)

About 27% of taxpayers annually need to pay the IRS when they file their tax returns. If you are one of these individuals, you need to figure out how you are going to pay. When you have the amount needed, you can use a debit card, mail a check with your return, or have the funds withdrawn from a savings account.

If you cannot pay the amount, then you can use a credit card or setup a payment plan with the IRS. Pay as much as you can by the tax deadline and wait for the IRS to tell you how much a month additional you should pay. An Online Payment Payment Agreement will give you up to 120 days to pay off the balance. Find this form on the IRS website, IRS.gov.

IRS Form 9465 gives you more than 120 days to pay the IRS for the taxes you owe. This is considered an installment agreement and is available with the major tax preparation software packages including TurboTax. There is a small fee to setup the installment agreement but if this is your only choice, it is the way to go.

Consider all the costs involved when deciding how to pay your taxes when you file your 2014 tax return. If the APR on a credit card is high, then going directly to the IRS could be your best plan of action. Just make sure that you have everything setup prior to the filing deadline or you could face additional fees and penalties, making your debt burden even bigger.

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