IRS Tax Tip 2011-64

The IRS has released its top 10 things to do if you cannot afford to pay all of your taxes right now. There are a few of them that I like:

Pay as much as you can. This will reduce the amount of penalties and interest that you may owe.

You may want to pay the tax using a credit card or getting a loan through a bank. The interest charged by the Internal Revenue Code is probably higher.

Some people may qualify for a short amount of additional time, up to 120 days, with no additional fee. This option also may minimize the amount of penalties & interest owed.

Apply for an installment agreement by filing form 9465. There is a one-time fee of $105 to set-up the arrangement, but if you pay by direct debit from your account the fee is reduced to $52. Lower income tax payers may pay a fee of only $43.

For more information, visit the IRS website at www.irs.gov.