Occasionally, after you finish your tax paperwork, you will find that instead of getting a refund, you might own back taxes. While you have different options to repay your back taxes, you may be able to get emergency cash from LoanMart in as little as 24 hours3. But before you a take out a title loan or personal loan, make you sure double check your tax documents.
If you have taxes that you need to pay, there are a few different things you should do:
- Double-check that the math is correct – It could be a simple error that resulted in you owing money.
- File your tax return on time – If you file a tax extension, it only pushes back your filing date. It does not push back the due date for paying.
- Determine exactly how much you owe – The amount you owe will affect which repayment options are available to you
- Determine how much you can pay – You’ll be charged interest and fees on the balance that you don’t pay, so you’ll want to make that amount as small as possible.
Once you’ve figured out what portion of your back taxes you can pay, you’ll need to select the best method to pay the IRS. Consider how title loans can help get you the emergency cash you need.
What are the different ways I can pay my back taxes?
There are a number of different ways you can pay your back taxes. Note that these assume you owe less than $25,000:
- IRS2GO – This is the official IRS app. Not only can you use it to pay your taxes, you can do things like view the status of your return and get free tax preparation tips.
- IRS Direct Pay – A free, secure way to pay the IRS the money you owe. You can even schedule payment in advance from your checking or savings account. No need to register or put a check in the mail.
- Pay by Credit Card – You can use various payment processors to pay your tax bill. They may charge a processing fee. Depending on the circumstances, it may be tax deductible.
- Pay when you E-File – You can schedule a payment to occur on or before the due date for your tax filing. You can have it taken directly out of your bank account using an Electronic Funds Withdrawal.
- Pay using the Electronic Federal Tax Payment System – You can pay your taxes online, or by phone with the phone number 888-555-4477.
- Pay by Check or Money Order – The IRS recommends you use other means, but if you prefer to pay by mail, you can find the details here.
What do I do if I can’t pay all the taxes I owe?
If you can’t pay all the taxes you owe, you have a few options. Note, you’ll likely accrue interest and fees as long as you owe money, regardless of which option you select:
- Apply for an Online Payment Plan – There are two types:
- Short-Term – You may be eligible for a short-term payment plan if you owe less than $100,00 in taxes, interest and fees, and if you can pay the balance in 120 days.
- Long-Term – If you owe less than $50,000 in taxes, interest, and fees you can potentially set up a longer-term payment plan.
- Make an Offer of Compromise – You might be interested in this option if you owe more than you think you can ever pay. Often advertised by companies claiming they can get the IRS to settle for pennies on the dollar of your owed taxes, you’ll likely have to offer your entire net worth, i.e. everything you have, for them to accept.
- Get a loan – But not just any loan. Title loans may actually be one of the quickest ways to get fast cash in as little as a day3. With LoanMart, we have years of experience in title loans, and may help you get the money you need to pay for taxes1.
Whichever option you choose, you should pay as much as you can immediately. Penalties are assessed based on the remaining balance you owe.
How can I pay my back taxes?
There are a number of short and long-term things you can do to pay your back taxes:
- Take money out of your savings account – The interest you earn on the account is likely to be less than the IRS will charge you. However, you should avoid taking money out of retirement accounts like 401(k)s as you will probably lose a lot of the money to the early withdrawal penalty.
- Sell assets or things you don’t use anymore – If you have a car, real estate, or even things you don’t use anymore, you can convert them to cash and use that to pay part of your bill.
- Borrow money – Depending on the amount, you may be able to get it from friends or family. If not, you can try getting a bank loan.
- Get a part-time job – If you work ten hours a week at $10 an hour, that’s nearly $300 a month after taxes.
When in need of additional funding to pay for taxes, title loans may be a favorable option. Car title loans from LoanMart may be a great way to get essential funding without all the hassles that can come with traditional lenders. One of the best things about car title loans from LoanMart is that they are fast and efficient. You could even receive your car title loan funding as soon as the next business day3!
Check out our application and see how you can use emergency money from a title loan to pay for taxes!
How can I avoid owing taxes?
You can avoid owing taxes in the future a few different ways:
- Determine your tax withholding – You can do this with the IRS’s withholding calculator.
- Change your tax withholding – If your employer takes out your taxes, you’ll have to arrange it with them. If they don’t, you’ll have to manage it yourself.
Owing the IRS money can be a scary thing. Especially if you aren’t sure how to pay it. Now that you know a little more about the options available to you, you can determine the best way for you to pay your back taxes. But also consider how emergency cash from title loans can help you, especially when you get your title loan from LoanMart!