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Wednesday, February 16, 2011

When You Don't Have Cash For Federal Tax Owed

Help! I can't pay my tax bill

You're almost done with your federal income tax return, and you're already thinking of ways to spend your refund. Then, the unthinkable happens--instead of a refund, you find that you owe $3,000. Or perhaps you've just received an IRS notice in the mail claiming that you owe $9,000 for the retirement plan distribution you took two years ago. You thought it was tax free at the time. Whatever the reason, you're now in the unenviable position of owing money to the IRS--and you don't have the cash. What do you do now?
First, don't panic. You have several options. That said, however, don't put your head in the sand. The IRS won't go away, and the amount you owe will only grow larger if you procrastinate. If you ignore your tax bill entirely, not only will interest and penalties accrue, but the IRS may go after your assets and wages as well. You can avoid all of that unpleasantness by finding a way to pay your taxes. Here are some possibilities.!-I-can-t-pay-my-tax-bill

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