April 15 is the normal deadline for not only filing, but also paying your income taxes. However, that date was pushed back this year due to the coronavirus pandemic, and now the revised July 15 deadline is right around the corner. So it’s time to get your taxes in order if you haven’t already done them.
You can use one of the major tax software programs to file your return, and if you have a simple tax situation, you can probably even do it for free. But what about actually paying your taxes, if you don’t have the cash today to pay taxes you owe on your income from last year? Do you have any options if you can’t pay your bill?
Actually, yes — there are three. And while each one has pluses and minuses, all of them are better choices than simply ignoring your taxes, which will result in the Internal Revenue Service and your state tax authority adding penalties and interest to the amount you already owe, and could lead to even more unpleasantries down the line.
So if you’re staring down either a federal or state tax bill on July 15 that you can’t pay right away, consider which of these three options will work best for you.
The IRS, along with a number of state tax authorities, is open to letting you pay your taxes over time if you can’t pay your tax bill in full. “The IRS offers short-term (paying in 120 days or less) or long-term payment plans, typically referred to as installment agreements,” explained Darrell Groves, managing director of the accounting firm DWG CPA and president of t