- Don’t not file your income tax return because you don’t have the money you owe. You can file an extension that will allow you more time to accumulate the money. You can make payments to the IRS; you will pay interest on the amount you owe or you can borrow the money from bank, home equity, and other sources. While these might not be the best options for paying your taxes, it is so much better than having the IRS come after you and they will and they will in addition assess a penalty. It is against the law to not pay your taxes, remember Al Capone?
- Don’t ignore the IRS. If you have received an IRS letter; don’t just hope they will go away. Once they have your number, they are relentless in pursuing what they want. They have the power to file a “Notice of Federal Tax Lien” against your property (that includes your house, car, or any of your personal property) and place a garnishment against your wages. They won’t just go away, so stand up and face the situation.
- Don’t get a refund-anticipation loan. If the firm that prepares your return offers you a loan in anticipation of your refund, don’t accept it. The interest on that loan is extremely high (as much as 100% APR). This is an outrageous amount of interest, and these loans should be avoided.
- Don’t pay your taxes with a credit card. If you don’t have the money to pay the taxes you owe, you need to find ways other than a credit card to raise the money. Unless there were unusual circumstances that caused this problem, you need to raise your exemptions in order that this does not happen next year. Paying taxes with a credit card is definitely not a smart financial move.
- Don’t spend your refund as soon as your receive it. According to the U.S. Bureau of Economic Analysis, Americans are saving less money than they did just a couple of years ago. That is a bad trend especially at a time when life expectancy favors living into the 90’s. Tax refunds and rebates are a good way to kick-start a savings program. Saving money requires discipline and determination. Make saving money a habit and get started today with your tax refund.
Filed under: personal finance | Tagged: credit cards, saving money
[...] How to Avoid 5 Stupid Income Tax Mistakes. Don’t not file your income tax return because you don’t have the money you owe. You can file an extension that will allow you more time to accumulate the money. You can make payments to the IRS; you will pay interest on the amount you owe or you can borrow the money from bank, home equity, and other sources. While these might not be the best options for paying your taxes, it is so much better than having the IRS come after you and they will and they will in addition assess a penalty. It is against the law to not pay your taxes, remember Al Capone? [...]
[...] willrwright wrote an interesting post today onHere’s a quick excerpt Don’t not file your income tax return because you don’t have the money you owe. You can file an extension that will allow you more time to accumulate the money. You can make payments to the IRS; you will pay interest on the amount you owe or you can borrow the money from bank, home equity, and other sources. While these might not be the best options for paying your taxes, it is so much better than having the IRS come after you and they will and they will in addition assess a penalty. It is against the law to not pay your taxes, remember Al Capone? [...]
[...] How to Avoid 5 Stupid Income Tax Mistakes. Don’t not file your income tax return because you don’t have the money you owe. You can file an extension that will allow you more time to accumulate the money. You can make payments to the IRS; you will pay interest on the amount you owe or you can borrow the money from bank, home equity, and other sources. While these might not be the best options for paying your taxes, it is so much better than having the IRS come after you and they will and they will in addition assess a penalty. It is against the law to not pay your taxes, remember Al Capone? [...]