Don’t Wait Until It’s Really Too Late To File Taxes
Yes, I know that April 15 has long come and gone. But 11 million taxpayers requested a six-month extension for their 2008 taxes, which means that - for many Americans - the real do-or-die deadline is this Thursday.
With money tighter than ever, it's understandable that so many of us are wracking our brains, trying to figure out how we're going to pay that tax bill. Or maybe we were able to scrape enough together to pay our taxes on time - but we're not sure we'll be as lucky less than six months from now when we do the tax dance all over again.
But here's some advice - even if you don't have the money, file anyway and worry about how you'll pay later. If you don't file, you'll start racking up penalties immediately after your deadline - sometimes up to 25 percent of what you owe. In the best case scenario, you'll owe a lot more money. Worst case scenario, you could wind up in jail. You're better off filing and only paying what you can afford, whether that's half your payment, 10 percent or - for the moment - nothing at all. The IRS can be surprisingly lenient. No, they won't forgive your debts - but they may let you work out an installment system or a way to lower your penalties.
And there's another way to make paying your taxes easier - bankruptcy. If you can't afford to pay your taxes every year, something is wrong - and it's probably too much debt. Bankruptcy can give you a manageable way to start paying down non-mortgage debts like your credit card balance, so you can reduce interest and obligation and start allocating that money where it's most needed - your tax bill, mortgage, etc.
Want even more good news? Sometimes tough economic times can work in your favor. If you earned significantly less in the current tax year than in previous years, you might owe less than you think. If you experienced difficulties - such as large medical bills, for instance - you might be able to take credits you didn't realize were available.
To make a long story short, there are ways to take responsibility for your debts even if you can't afford to pay them right now. At DebtStoppers, helping put you back in charge of your finances is what we do. Sign up for a no-cost one-on-one debt analysis with one of our Atlanta bankruptcy attorneys to learn if a bankruptcy could help you get caught up with your bills - and the tax man.