What is the best way to pay federal taxes when you have no cash. Credit card, loan, IRS payment plan?

Question

I owe $2,000.00 dollars. What would the interest rate be,how does it accrue, how long would i have to pay if I went the IRS payment plan route? I know I should have them take more out during the year, but if I did, I could not live on my paycheck.

Answer 1

With the IRS the Penalties and Interest are going to be higher, If you have other means of paying your tax by or before the due date it will be more beneficial to you
From the IRS website
Generally, interest is charged on any unpaid tax from the due date of the return until the date of payment. The interest rate is determined every three months and is the federal short–term rate plus 3 percent. Interest is compounded daily. If you file on time but don't pay all amounts due on time, you'll generally have to pay a late payment penalty of one–half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full or the 25% maximum penalty is applied. The one–half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy. For individuals, who file by the return due date, the one-half of one percent rate decreases to one-quarter percent for any month in which an installment agreement is in effect.
http://www.irs.gov/taxtopics/tc653.html

Answer 2

Request an installment plan. Go to www.irs.gov and click personal Income tax and click Forms. Look for Installment agreement. fill it out and send it in asap. They will respond to you in about 30 days if they accept your payment plan. The key is to have your tax liability paid asap. so if you can handle $200 a month that's great.. this.needs to be paid off within 5 years but remember they tack on interest and penalties so the sooner the payoff the better. try to pay it off this year before next years filing date comes up.

lower your deductions. If you are single don't claim more than 2 deductions if you itemize. If you take the standard deduction then stick with (1) exemption

Answer 3

I have a feeling that you are afraid to call the IRS. I don't know why. All you have to do is pick up the phone and call them. THEY know exactly what you'd have to pay, the amount of penalties and interest, and what payment plan they would work out with you. Everyone else is just "guessulating" as you can clearly see by the variety of answers here.
This must be a big question as you made the "White box" on the answers page! Wow! I've never had that happen to one of my questions! For that I'll star this one!
Good luck to you! Call IRS! *wink*

Answer 4

Don't use your credit card; they tack on a percentage and useage fee.

Contact them for a payment plan.

Re having more taken out, it's either find a way to live on your paycheck, or continue facing this financial hit every year.

Answer 5

Dont file your taxes and they will never know or just take some extra deductions and they will still never know. Cheat as much as you can.. everyone else does

Answer 6

IRS int. rates are sky high.