Those of you looking to avoid filing taxes are probably doing so because you fear you may owe the government instead of them cutting you a check. When all your tax preparation is done, will you even have enough to satisfy Uncle Sam? If this may apply to you, don’t panic. There are options we will list below.
1. Apply for an extension as part of your tax preparation
Have your tax pro or accountant help you file for a short term extension, which is a lot like a payment plan for the taxes you owe. Depending on how much you owe and how you are filing, you can get anywhere from 60 to 120 days to pay off your balance in full. Be aware that this is not a 
freebie from the IRS, they can still charge you penalties and interest that is proportionate to the amount you owe and any other in discrepancies you may have.
The requirements for filing for an Online Payment Agreement for Individuals and Businesses are:
- Individuals who owe less than $50,000 in combined tax, penalties, and interest who have completed their tax preparation and filed all returns.
- Under certain extenuating circumstances, individuals who owe up to $100,000 can also file for this extension.
- Businesses who owe less than $25,000 in combined tax, penalties, and interest who have completed their tax preparation and filed all returns.
- In order to file, individuals need a valid email address, address from their most recent tax return, and Social Security Number (just one spouse’s SSN if filing jointly) or an Individual Tax ID Number or ITIN.
Tax preparation tip – Do not wait for a bill from the IRS. They know you know you owe the money and may only remind you when it is past due. They are not understanding about rescinding late fees, so be sure to keep track of each payment.
2. Apply for a longer extension as part of your tax preparation
If you need more than 120 days to pay your tax liability, have your tax preparation pro fill out IRS Form 9465-FS – Installment Agreement Request. The IRS will assess a fee to set up the long term payment plan, but you will be able to pay the tax bill in monthly increments that you set up. However, this long term extension and payment plan must pay the balance in full by the end of three years. A few facts on Form 9465:
- You can set up a direct debit plan with the IRS to pay the balance, which is easier than waiting for a bill from them that may never come.
- You can also set up to have the balance paid through payroll deductions, which is also better than waiting for a bill – and it keeps a record of what you paid and when with a third party.
- The fee to set up an installment agreement has increased to $120, up from $105 in 2014.
- If you owe less than $10,000 you may qualify for a guaranteed installment agreement. This plan is beneficial because it allows you to bypass any IRS penalties and interest and is guaranteed so long as you meet certain requirements.
Tax preparation tip – File this form as early as possible because it often takes the IRS a month to approve – or even reject – the installment agreement.
3. Apply for a loan as part of your tax preparation
It may sound crazy, but if you can qualify for a loan from a bank or credit union that offers better terms than the penalties and interest of the IRS, it may save you hundreds or even thousands to borrow privately.
Tax preparation tip – Do not delay filing your taxes. You will still owe what you owe, and if the IRS has to come after you, chances are they will bring hefty fines with them.
4. Call the IRS
A sort of last option for those who are frustrated with the above but no so frustrated that they don’t mind dialing the agency and being put on hold for an indeterminate amount of time. You can reach the IRS toll free by dialing 1-800-829-1040.
Tax Preparation in Houston
And if you are in need of expert tax preparation services in Houston or the surrounding area, please contact me.