Owe Taxes And Don't Have The Money?
Do not panic, we at eFile.com are here to help. Before we assist you in finding ways to pay your taxes owed, ask yourself these 3 questions first:
1. Are you going by a "gut feeling" about owing taxes, or have you just completed a tax return and found out that you owe taxes?
2. What is the true cause of you owing taxes now, either by your gut feeling or as a result of estimating taxes or completing a tax return?
3. Are you prepared to make changes now or in the future so you can avoid owing taxes on Tax Day in the future?
The most important thing you can do is to file your taxes - your tax return or for the current tax year an extension by July 15, 2020 - on time. If you missed this deadline, you still have until October 15, 2020 to efile your returns. If you file after the deadline, late filing and/or late payment penalties might occur but they will be much less the sooner you file and/or pay. Most taxpayers don't know that the late filing penalties are considerably higher than the not paying on time penalties: File Even If You Can't Pay!
Life situations can come at us fast. For example, an emergency or other event happens and suddenly there is no money left to pay for taxes. Even if your "gut feeling" is correct about owing taxes, you must get the facts first by following these steps:
- Use Our Free Tax Tools: Carefully examine your tax situation with these easy to use personalized tax tools.
- Discover Tax Deductions and Credits: Review available IRS/Federal tax deductions and tax credits.
- Estimate Your Taxes: The eFile.com Tax and Refund Estimator generates a personalized tax return for you.
- See If Tax Penalties Apply to You: IRS Tax Penalties for Not Filing are higher than Penalties for Not Paying. Find out potential IRS tax penalties.
- E-file or File Your Tax Return or Extension By Tax Day: As you can see in point 4, not filing a tax return or extension (even if you cannot pay your taxes now) is more costly in terms of potential penalties than not paying your taxes now. Use eFile.com to start and e-file your tax return or at least a tax extension by Tax Day (usually on April 15 of the current Tax Year, however for 2020 it was July 15 due to the COVID-19 crisis). If you missed the Tax Day deadline or efiled an extension, your next efile deadline is usually on October 15 of the current Tax Year. Be aware that an extension does not give you more time to pay any taxes owed.
- File Your Tax Return for a Previous Tax Year: On eFile.com, you can only prepare and efile a tax return or extension for the current Tax Year. For previous Tax Years, you must complete the tax return forms manually and mail them to the IRS. You can find and download the Tax Forms by Tax Year here.
Once you have completed these steps, you will now know for a fact how much taxes you owe. Again, what is important is that you have e-filed/filed your return as soon as possible.
Tax Payment Estimates
Of course, the most accurate way to find out taxes owed or due is a tax return. However, there are many other scenarios that require to plan and or estimate taxes prior to filing a return or paying taxes.
Estimate your 2019 taxes first before you prepare and eFile your income tax return.
Use the eFile.com PAYucator when you are planning your paycheck tax withholding by pay period.
Use the eFile.com WITHHOLDucator when you are planning your multi job or income tax withholding for the given tax year.
Define your personal Tax Return Goals, as they are the basis for your tax withholding and tax estimate payments for the given tax year.
Previous year or back taxes.
As stated above, late filing penalties are generally higher than late payment penalties. Find out for yourself. Currently, we only have a tool to estimate IRS penalties and not state penalties.
Need more Tax Help on ways to estimate or your taxes? Contact one of our Taxperts.
Tax Payment Options
Tax Balancing and Minimizing Tax Payments
Ways to Obtain Money To Pay Taxes Owed
Whether you owe hundreds or thousands, you should really ask yourself whether you have the money to pay your tax debt. Here are some options to consider:
Be aware that the options above may only be good ideas if any interest you end up paying is less than the interest and penalties the IRS will charge you.
Take a Tax Break Now
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