U.S. Tax Return Services Mississauga: What to do if you are Unable to Pay Taxes?

 Sometimes you may be finalizing filing your tax return and find that you cannot pay the amount owed. Ideally, this should not happen as you should pay your taxes throughout the year such that by April, you only have a small amount to clear, or you are owed tax refunds. If you something has happened in your life and you are unable to pay taxes, U.S tax return services Mississauga advises that you take any of the below steps.

Request Payment Extension

Filing form 4868 only gives an extension to file the paperwork with IRS, but not an extension to pay what is owed. Paying taxes on time helps reduce penalties and interest rates accrued on taxes. If you are facing justifiable hardships, you can request for a payment extension by filling out form 1127, which gives you a six months extension. When submitting this form, you also need to provide an itemized statement showing funds spent or received in the past three months and also a statement showing current assets and liabilities.

Apply for an Installment agreement

If you need more than a few months to settle the tax debt, applying for an installment agreement is better. You can do this through U.S Tax return services Mississauga, who can fill for you form 9465. With an installment agreement, forceful collection cannot be done, but you will still owe interest and penalties.

Borrow Money

You can borrow from your emergency fund to avoid paying credit unions and credit card interest. You can then slowly repay yourself with every paycheck, having settled the urgent matters first. If you do not have an emergency kit, you can pay off your tax bill from your credit card at a 2 percent convenience fee.

If you are legitimately unable to pay your taxes, talk to U.S. tax return services Mississauga. They will help you find the easiest and most affordable way to meet your obligations.