The vast majority of Americans get a tax refund from the IRS each spring, but what if you are one of those who end ends up owing? John Fraker, San Jose Tax Attorney at Ainer & Fraker, LLP weighs in on the topic.
The IRS encourages you to pay the full amount of your tax liability on time by imposing significant penalties and interest on late payments if you don’t. So if you are unable to pay the tax you owe, it is generally in your best interest to make other arrangements to obtain the funds for paying your taxes rather than be subjected to the government’s penalties and interest. Here are a few options to consider.
- Family Loan – Obtaining a loan from a relative or friend may be the best bet because this type of loan is generally the least costly in terms of interest.
- Credit Card – Another option is to pay by credit card with one of the service providers that work with the IRS. However, since the IRS will not pay the credit card discount fee, you will have to pay it and pay the higher credit card interest rates.
To learn more about further opportunities to avoid government penalties and interest charges, check out the following links about Installment Agreements and Taping Retirement Accounts.