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Ways you can pay your taxes owed

By Edited Jun 23, 2014 0 0

You have the ability to pay your tax debt in a number of ways. What option you choose depends on how much money you have, how much you owe the IRS, and what you are most comfortable with. The way you pay your taxes owed may not be the same as the next person – and there is nothing wrong with that. You need to get back in good standing with the IRS in the way that you feel most comfortable doing so.

If you can pay in full you probably want to consider this method above all others. When you send the IRS your entire tax debt they are going to forget about the past and put your account in good standing. That is what you want, right? Yes, it can be difficult to pay all of this money at once but in the long run it ends up saving you on penalties and interest. Do you have enough cash to pay in one lump sum? If not, can you get your hands on it by borrowing from somebody?

An installment agreement is a very common way of paying taxes owed. With this option you are not paying all your debt at once, but instead a little bit at a time over the course of many months. This may be the slow way of doing things, but once you have your installment agreement setup you will at least be able to see the light at the end of the tunnel. Another benefit is that the IRS is usually quite kind in agreeing to a payment plan. The same cannot be said for other options, such as an offer in compromise.

If you are opting for an offer in compromise keep in mind that the IRS only accepts 10 to 15 percent of these. You need a very good reason as to why they should let you pay only a portion of your total liability.

With so many ways to pay your taxes owed you should have no problem finding one that you are comfortable with. Do any of these methods make sense for you?

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