Today, Optima Tax Relief’s Chief Tax Officer and Lead Tax Attorney, Phil, shares what to do if you missed the tax deadline and how to avoid making things worse.
Step One: Pay What You Can
If you missed the deadline but have the funds available, the best thing you can do is pay your tax bill in full right away. This helps minimize the damage by reducing the amount of penalties and interest, which continue to compound daily until your balance is paid off.
If You Can’t Pay in Full, You Have Options
Not everyone can pay their full balance at once and that’s okay. The IRS offers two main options if you need more time or flexibility: Installment Agreements and Hardship (Currently Not Collectible) Status.
- Installment Agreement: This is a monthly payment plan you set up with the IRS. It allows you to pay down your balance over time and avoid more aggressive collection actions, as long as you stay current.
- Hardship Status: If you truly can’t afford to make payments, because of unemployment, medical issues, or other financial struggles, you may qualify for hardship status. This means the IRS temporarily pauses collection efforts, and you pay $0 per month. However, it’s important to know that penalties and interest will still accrue, so it’s not a permanent fix.
Take Action Quickly
The longer you wait, the more costly and stressful your situation can become. The IRS has powerful collection tools, including wage garnishments and bank levies, so it’s always better to address your tax debt sooner rather than later.
If you need tax help, contact us today for a Free Consultation