What NOT to Do If Your Estimated Tax Bill Is Unaffordable

What NOT to Do If Your Estimated Tax Bill Is Unaffordable

• Feb 27, 2023

As February draws to a close and the tax deadline approaches, many Americans are getting their tax returns ready. This often involves calculating your estimated tax bill, whether you do it on your own or with the help of a CPA. If you calculate that final number and know in an instant that it’s more than you can afford, what should you do? Keep reading to learn some common mistakes that people make in these situations, and find out what not to do when your estimated tax bill is more than you can afford.

Don’t Avoid Filing Your Return

One of the most common mistakes that people make in these circumstances is to avoid filing their return altogether. The reasoning behind this can sound quite logical: If you don’t file the return, then the IRS might not notice that you owe them money. Sending in that return can certainly feel like you’re alerting the IRS to your tax bill, but the truth is, they are going to notice that you owe taxes eventually—and then, they’ll also notice that you didn’t file a return.

Whether you file your return or not, your tax bill is still due on April 15^th. Avoiding filing will simply add “failure to file” penalties to your bill, putting you in even more debt. No matter how tempting it might seem to try to fly under the radar and avoid notice, you should always file your tax return on time, no matter how much your tax bill may be.

Don’t Put Off Paying What You Can

Many people have an “all or nothing” mentality when it comes to their tax bill. Of course, your tax bill is due in its entirety on the tax deadline day; however, if you can’t afford the entire bill, you shouldn’t simply choose to make no payment at all. It is always better to make at least a partial payment towards your taxes when you file your return. This shows the IRS that you are making a good-faith effort to pay what you owe, and not simply choosing to ignore the bill. No matter how minimal the payment might feel when compared to your entire tax bill, you should try to make a partial payment towards that bill as soon as possible.

Don’t Wait Around for the Tax Notices to Show Up

Once you’ve filed your tax return, whether you were able to make a partial payment or not, you shouldn’t just sit back and wait for the IRS to reach out to you about what you owe. It’s important to be proactive about situations like these and reach out to the IRS yourself to discuss your options. Again, this demonstrates your sincere effort and desire to settle your tax debt, and shows the IRS that you are making your tax bill a priority.

Look into ways to contact the IRS and discuss tax settlement options as soon as you file. While it may be difficult to get through to them in the middle of tax season, it’s important to be prepared, know your options, and open those channels of communication as much as possible and as soon as you possibly can.

Don’t Try to Handle This Alone

If you think filing taxes on your own is stressful, you can probably imagine just how stressful settling your overdue tax debt on your own can be. There are several different tax debt relief programs available, but each one has very specific requirements related to your personal circumstances and financial details if you hope to qualify. Blindly applying to tax settlement programs wastes time and—because many of them have application fees attached to them—money. Having an advocate who’s experienced in handling these kinds of applications can help you get your application submitted sooner, ensure you select the best program for your financial situation, and give you a better chance of being approved.

At the IRS Advocates, we’ve helped countless taxpayers like you to settle their tax debt, whether it’s a new tax bill you can’t afford, or tax debt that you owe from past years. If you’ve received your estimated tax bill and know that you won’t be able to pay it before the tax deadline, contact us today. We’ll provide you with the guidance you need to start communicating with the IRS about settling your debt, help you with selecting a tax debt relief program, and handle the complexities of the application process on your behalf. With our help, you can get your tax debt under control sooner, and avoid having it control your life. Call now to schedule a free initial consultation.