I have about a $3000.00 tax liability for 2006 and am strapped for cash. Would it be better to make payments to the IRS or to access my line of credit with my bank at about 13%? My line of credit has a zero balance and when I used it last year with about $10,000.00 balance I was only paying about $100.00/month in payments. It's rate is based on about 2% over prime and payments go down as balance decreases. I settled with several credit card companies last year and since I was insolvent at the time it was not taxed as income. I'm almost out of the financial woods and have destroyed all my credit cards. Any thoughts of wisdom out there would be appreciated.
2007-03-18 06:28:14 · 2 answers · asked by butkus 1 in Business & Finance ➔ Credit
I haven't come across anything on this specifically, but I've heard that the IRS can charge upwards of 25%.
2007-03-18 07:10:52 · answer #1 · answered by Anonymous · 0⤊ 1⤋
If I am reading this link properly, the current rate is 8%. Compared to the 13% on you line of credit, that's worth a call to the IRS to find out for certain.
2007-03-18 08:26:27 · answer #2 · answered by STEVEN F 7 · 1⤊ 0⤋