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Entry bubble Tips for Income Tax Owers

By: Jake | April 07, 2008 | Category: Money

It's no fun owing income taxes. The same day I came home a proud college graduate I received a bill from the IRS for $500 because I forgot to claim some freelance writing payments on my previous year's return. Suffice it to say, my graduation money didn't go towards a nice vacation or new guitar.

It's no surprise to me that last year the IRS received 61 percent of balance-due returns (people who owe) after April 15. Many people will be at the post office on April 15 this year, submitting their balance-due returns and filing extensions (even though their estimated tax amount will still be due April 15).Tax Keyboard Key

If you owe taxes it is important to pay the whole sum right away to avoid penalties and late fees. The IRS accepts checks, money orders, cashier's checks, credit cards, cash and electronic funds transfer. If you e-file you can file your return and set your payment to be made by electronic funds transfer from your bank on April 15.

If you owe and you do not have the money to pay, the IRS has payment plans. The IRS actually recommends you use a credit card or bank loan to make the payment in one lump sum, rather than pay their rates. Generally, credit cards and bank loans have a lower interest rate, so you should check with your bank.

Those of you who are due a refund for 2007 have probably already filed since 73 percent of people who were due a refund last year filed before April 15. I got a refund this year and put it towards a new toy (hint: it's not the cat).

Be sure to check with your state government for income tax filing deadlines. The deadline to file federal income taxes for 2007 is Tuesday of next week.

| Comments [5] | envelope Email This Entry | Tags: fees  penalties  taxes 

Comments:

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I believe that people wouldn't mind paying taxes if they thought there was some kind of equity in the system. We have billionaires paying a lower percentage in taxes than their maids that clean their toilets. To make matters worse, Ronald Reagan doubled the FICA tax on the middle-class then capped it at $90,000, giving the wealthy a monster tax cut.

Posted by Citizen Jmaximus on April 07, 2008 at 08:40 AM EDT #

Thanks a lot

Posted by ilahiler on April 07, 2008 at 10:18 PM EDT #

Thanks for your comments ilahiler and thanks for your insight Jmaximus. Apologies to all since there were some technical difficulties with my post yesterday. I think I have them resolved.

Posted by Jake on April 08, 2008 at 10:47 AM EDT #

I've always been curious how people would choose to have their taxes applied if given the choice. As an experiment, I think the IRS ought to include a checklist with next year's tax forms on which people could indicate where they want their money to go. I think it'd be informative.

Posted by Taxation without Representation on April 10, 2008 at 11:52 AM EDT #

ONE DAY I CAME HOME AND THE IRS AUDITED MY 1998 TAXES AND CLAIMED I OWED 1000 IN BACK TAXES A PERSONAL FRIEND OF MY FATHER AND I DID OUR TAXES HE WAS A CHURCH MEMBER AND WAS DECEASED I COULD GET HIM TO LOOK INTO THERE CLAIM SO I JUST WENT DOWN TO THE IRS AND FOUGHT IT. JUST BY SAYING I DON'T OWE THAT AND THEY AGREED TO LOWER IT TO 100 IF I PAID THAT THEY WOULD LET IT GO. SO I COMPROMISE AND AGREED TO THE 100. I HAD NO DOCUMENT AND MY TAX PERSONAL NOT AVAILABLE I SHIFTED THE BURDEN ON THE IRS TO PROVE WHAT I OWE AND SAVED 900.

Posted by AUDITING THE AUDIT on April 11, 2008 at 01:33 PM EDT #

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