Oh No! I Owe!

by Tracey Hrica, EA Mar 06, 2020 | Share

One in five U.S. taxpayers could owe the IRS money this year. If you can’t pay on the 15th, take a deep breath — there are things you can do.

Even if you can’t afford to pay your taxes, it is imperative that you still file a timely return and make arrangements to pay what you owe.  Failing to do so will result in penalties and interest.

However, don’t panic.  You should contact the IRS to discuss your payment options at 800-829-1040. The agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise, or by temporarily delaying collection by reporting your account as currently not collectible until you are able to pay. In some cases, the agency may be able to waive penalties. However, the IRS is unable to waive interest charges which accrue on unpaid tax bills.

Also remember, even if you file an extension, any tax owed is due April 15th, regardless of when the return is filed, and interest will accrue from this date.

If you don’t want this to happen again next year, there are steps you can take to avoid this unpleasant situation.  If you are an employee who receives a W-2, go to your payroll department as soon as possible and submit a new W-4 form. You need to make adjustments in order to have more tax withheld from your paycheck.  You may need to ask your accountant or tax preparer for assistance.  You can also read this article for help understanding the new W-4.  If you are self-employed, talk to your accountant about increasing your quarterly estimated payments.  Your goal should be to make sure you’re not having too much withheld, but at least enough to cover your taxes.

About the Author

Tracey Hrica, EA

Tracey Hrica joined the firm in 1995. She is an Enrolled Agent(EA), which enables her to prepare personal and business tax returns and represent clients before the IRS. Working closely with her clients, Tracey’s primary areas of concentration are new client set up and QuickBooks support. As a QuickBooks ProAdvisor, she works closely with clients who rely on QuickBooks for the day to day running of their business. Tracey has expertise in both QuickBooks Desktop and QuickBooks Online.

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