By Rosalyn Partin, H&R Block
Not everyone gets a refund on their tax return. Some taxpayers owe due to not having enough tax paid in throughout the year. This may be by choice or the taxpayer may be surprised or even shocked to learn about the balance due.
Causes of a balance due on your tax return are varied. Some taxpayers just don’t have enough tax withheld from their paycheck throughout the year. Others may have taken distributions from their retirement accounts, have large investment income, or be self-employed. Whatever the reason for the balance due, here are some strategies to make the tax burden a little easier.
Even if your tax return is prepared and filed early, you have until April 18 to pay the tax balance due. By having your tax return prepared early, you can set a game plan to save as much as possible before the tax must be paid. We recommend that you have your tax return prepared as soon as you have gathered all your tax information so you know what the outcome is, and if you have a balance due, you know how much you will need to pay the tax.
If you are financially unable to pay the full amount of tax owed by the due date of the return (April 18 this year), you can make monthly payments through an installment agreement with IRS. While the IRS usually charges a fee to set up an installment agreement, the failure to pay penalty is cut in half. Some installment agreements are simple payment arrangements that you or your tax professional can set up using the IRS Online Payment Agreement tool. Others are more complicated to request and can involve sending IRS proof of your income and assets. In these cases, the IRS can limit your expense to a “reasonable” amount when it is calculating how much you can afford to pay every month. The best type of installment agreement for your situation depends on the amount you owe, how fast you can pay, and your financial circumstances.
Avoid the surprise of finding out too late that you have a balance due. Call now to schedule your appointment at H&R Block. Open Monday through Friday 9am-7pm and Saturday 9am-5pm. As always, we also accept walk-in clients at your convenience.
If you have questions or want to schedule an appointment, please call H&R Block in Manchester TN at 931-728-9462. H&R Block Has Your Back!