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Sunday, September 25, 2022
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Sometimes it’s just downright depressing when you think about where we are as a society. I mean, have you ever thought about how little we have progressed? Take for instance the Jetsons. I think it’s safe to say that we all thought the Jetsons was the blueprint of our future society. Yet, here I am in the year 2016 and I’m still not driving around New Jersey in a flying car for some reason. I have exactly zero robot maids and there’s not moving walkways everywhere I go.

But there’s one thing that makes me think we’ve really made progress. And that’s when you have to make a payment to someone. In the old days, if you had to pay back a friend, your choices were to pay by cash or check. And to get said cash or check to them, it involved either getting in your vehicle and driving to their house to physically drop it off or licking a stamp and sending it by snail mail.

But all that’s changed now. Gone are the days that you need to actually see your friends or lick any stamps. Look at your options now—PayPal, Chase QuickPay, Venmo, Square Cash, Google Wallet, and the list goes on. And if your friend still wants a check for some reason then you can just have the bank send it for you with a click of your mouse. Goodbye social interaction, hello technology. That’s real progress.

OK, so we’ve made some serious progress in our payment options, but the question for us is whether this progress has extended to when we have to pay the IRS for a tax liability. Chances are that if you’ve ever paid the IRS then you paid by check or direct bank withdrawal. But you may be surprised to learn there are other options available.

I Owe How Much?!?

Have you ever been punched in the stomach? Well, that’s exactly the way it feels if you’ve been unpleasantly surprised by a monstrous tax liability. But you actually have a couple of options if you don’t have all of the funds to pay immediately.

Assuming you owe $50,000 or less, one option is to request an installment plan using Form 9465. The application fees for this plan range from $43 to $120. Just realize you will be charged interest and penalties, which continue to accrue until the balance is totally paid off. You can choose the day of the month and amount you will pay each month, as long as it’s paid off within 72 months. If your balance is less than $10,000 then the IRS will generally automatically grant you a 36-month payment plan with no questions asked.

If you can pay your debt within 120 days, then it’s even easier. You can simply request a short-term extension using the IRS’s Online Payment Agreement.

Rack Up Those Miles: If there’s two things that us Jews are obsessed with, it’s food and credit card miles. Luckily, the IRS has authorized several companies to accept tax payments by credit card. But it’s going to cost you a bit more in convenience fees, so you need to do the math beforehand to make sure it’s worth using your credit card. The fees are in the range of 2% depending on the provider.

I’ll Take a Slurpee and a $7,000 Tax Bill

In one of the most unlikely partnerships since I watched that chimpanzee hugging a kitten on YouTube, the IRS joined forces with 7-Eleven and you can now pay your tax bill in cash at your local convenience store. Simply go online to the IRS.gov payments page and select the cash option. You will then receive a confirmation email from Officialpayments.com with instructions so you can be on your merry way for some refreshments and tax payments.

No matter what your situation is, make sure you file your tax return on time, even if you don’t have the money to pay. Failing to file is the worst thing you can do and I guarantee it will just make it worse. The IRS will not simply go away if you ignore your taxes. Unlike that awkwardness when your friend owes you money but you feel too weird asking them about it so you just don’t say anything but feel a deep resentment every time you see them until they pay you and you pretend like you forgot about it also even though you know you were going to remember that debt until the day you die, the IRS does not feel awkward asking you for money. So you’re going to have to pay the IRS, but at least now you know there are some options.

By Daniel Magence, CPA, Esq.

Daniel Magence, CPA, Esq. is a principal at Pristine CPA Solutions, LLC (www.pristinecpa.com). Pristine CPA Solutions offers tax and accounting services to individuals and businesses of all sizes, whether its tax returns, bookkeeping, payroll services or personal income budgeting. He can be reached at [email protected] or 201-326-6908 if you have any questions or comments, or are interested in using Pristine CPA’s services. Feel free to contact us for a free consultation.

 

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