What to Do if You Owe Tax
April 9, 2014 – TaxTalk Blog
Let’s face it – most of us who are getting a refund have already filed our state tax return and have spent or squirreled away the money. Many of us who owe tend to wait to the last minute to file. And, in these challenging financial times, this is an added stress no one enjoys.
Well, if you’re feeling stuck, not quite sure what to do, here’s a two-part approach designed to help you move forward.
First, be proactive – make sure to file your tax return by April 15 even if you can’t pay the tax due. Filing your tax return will get the procrastination monkey off your back and keep you on the right track.
Second -- if you can’t pay the full amount due up front, you’ve got options. Here are two courses of action to help you get in gear:
- Send in as much as you can when you file the tax return. Penalty and interest will be due on the unpaid amount, so the more you pay when you file reduces any penalty and interest due. Within a few weeks a bill will be sent to collect the remaining amount due.
- If you’re just flat out of funds right now, then go ahead and send in the tax return with no payment. Within a few weeks, a bill will be sent for the tax, plus penalty and interest on the full amount due.
If you just can’t come up with the full amount due when the bill arrives, you may be eligible for a payment plan. Basically, if you owe more than $100, and can pay at least 20 percent down, you will qualify (businesses will qualify if they owe more than $500, and can pay at least 20 percent down).
After you get the bill you can set up the plan online yourself or contact us with your request (addresses and phone numbers are on the back of the billing). Once the plan is approved, you can mail in payments or pay online.
Now, about filing your tax return – Indiana uses an online filing system called INfreefile. Go to www.freefile.dor.in.gov to see if you are eligible to access state and federal tax online filing at no cost.
Filing your tax return and taking advantage of options to pay your tax due will get you headed in the right direction. Now that’s a course to follow.
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