Getting a Tax Extension
Getting a tax extension isn't as dreaded as getting tax audited and will give you a little more time to get your documents and paperwork figured out to file with the IRS. If you owe, you still need to pay a deposit, but you can work out a payment plan for the rest. This will also give you time to figure out finances to pay a rather large bill. With a plan like this, it is not going to be such a drastic pull on your finances. This is why they offer this as an option for you and your family so you don't have to use all the credit available on your credit cards, etc. The interest rates that can be attached to some of these cards may be less than that of the IRS, but it will still take away your entire financial cushion.
If you needed to use those credit cards in an emergency, you would be unable to do so because of the IRS payment. Rather than put yourself in this kind of situation, it's better for everyone if you set up a payment arrangement. These can be spread out over several years so don't feel like you really have to put yourself in a difficult financial position. Most of the time, you can choose up a five-year plan if you can show that you are able to keep up with these payment agreements. This will give you more options to choose from and help your family maintain their current lifestyle.
Planning For a Tax Extension
Once you know that you're going to need a tax extension, then go ahead and finish filing the tax documents. Then, you need to contact the Internal Revenue Service and the state tax board to see what kind of arrangements they will accept. However, whatever amount you agree to, it's very important that you stick with it. If you don't, they could end up garnishing your wages and making you pay whether you like it or not.
Rather than put yourself in this kind of sticky situation, take a close look at your current income and expenses. Then, you'll know for a fact what you can afford and what you can't. If you get a professional's help doing this, they can give you some excellent suggestions as well. Usually, they will be familiar with how much of your income you can pay out and in what methods. This could be dependent on how much your other bills are costing you at the time and what you have already agreed to for recent purchases.
Keeping Up with Paycheck Changes
Don't feel bad about getting a tax extension arrangement either because it can be hard to predict how much you're going to owe. If you mess up on how many you claim during the year or by not keeping up with regular paycheck deductions. When you feel like it's too much, you can always change it with your employer. This should take effect on your very next paycheck and will allow you to either take more home or have more taken out to pay taxes in general. Of course, you may also want to get some advice from the Internal Revenue Service themselves as they are connected to all the recent changes. If things have changed significantly since last year, then you may want to handle your general taxes entirely different overall. Find out if you can subscribe to any newsletters or other informative sources from agencies who regularly keep up with this kind of data.
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