The title pretty much says it all. I know it’s not great, but I need advice on how to handle this. For 2022, we owed about $6,000, and for 2023, we owed around $2,000. We can’t afford to pay it all at once, but I’m hoping there are options. Any advice would be really appreciated.
File the returns even if you can’t pay the full amount yet. Once they’re filed, you can ask for a first-time penalty abatement. Then, set up a payment plan with the IRS.
Zion said:
File the returns even if you can’t pay the full amount yet. Once they’re filed, you can ask for a first-time penalty abatement. Then, set up a payment plan with the IRS.
What NTK said is spot on, but you might want to get some help from a CPA or EA.
@Kiran
Why, though? OP’s taxes don’t sound that complicated, and they seem to know how much they owe. No need to pay for something they can handle themselves.
Zion said:
File the returns even if you can’t pay the full amount yet. Once they’re filed, you can ask for a first-time penalty abatement. Then, set up a payment plan with the IRS.
Do I need to mail in the forms, or is there a way to file online?
@Gray
If you’re filing yourself, 2022 will need to be mailed in, but you might still be able to e-file 2023, depending on your software.
The IRS e-file system stays open until late November, but some tax software stops e-filing earlier. A tax professional can e-file both years if needed.
Zion said:
File the returns even if you can’t pay the full amount yet. Once they’re filed, you can ask for a first-time penalty abatement. Then, set up a payment plan with the IRS.
What exactly is the first-time penalty abatement, and how do I apply?
@Bailey
You can check it out here: Penalty relief due to First Time Abate or other administrative waiver | Internal Revenue Service
Zion said:
@Bailey
You can check it out here: Penalty relief due to First Time Abate or other administrative waiver | Internal Revenue Service
Will it also waive penalties for filing late?
First, just go ahead and file. Even if you can’t pay, not filing adds its own penalties. When you file, pay what you can, even if it’s just $10. You can set up a payment plan with the IRS and might qualify for a penalty abatement, too.
Take a deep breath, you’re going to be okay.
The good news is the IRS is willing to work with people in situations like this. For the amount you owe, you can set up an installment plan on the IRS website and pay it off over time with a reasonable monthly payment.
Try doing your returns on your own first. If you’re unsure or have questions, a tax professional can help, but they’ll need your original documents and won’t be able to simply “review” a return you did on TurboTax. You can also request a first-time penalty abatement from the IRS if you’ve never missed filing before. Just look it up on the IRS website.
Once you’ve filed, it’s a good idea to go back and double-check your numbers to make sure they’re right. Are you using any tax software?
ZETH said:
Once you’ve filed, it’s a good idea to go back and double-check your numbers to make sure they’re right. Are you using any tax software?
Yeah, I’m using TurboTax. Is there a better option?
@Gray
I use TurboTax too, just the basic version. Even with self-employed income and college credits, it works fine. Did something change in your income to make what you owe drop from 2022 to 2023?
This forum isn’t here to help or promote anything illegal. Please don’t post advice like this.