Taxes are a reality of life, and they come with a hefty price tag. It’s not uncommon for people to find themselves struggling to pay their taxes on time—or at all. If this is you, there are some steps you can take to alleviate the burden. But first, it’s important to understand what the four Deadly Sins of tax season are. Once you know how to avoid them, you can start taking steps to reduce your tax bill. Follow these tips and you’ll be in good shape!
Procrastination
Procrastination is the most common of the four deadly sins, and it manifests itself in ways that can have serious financial consequences.
When you procrastinate, you put off doing something that needs to be done because it feels like a hassle or because you think it will take too long. This puts you in a position where you end up owing more money than necessary.
Here are four ways to overcome your tendency to procrastinate:
1. Make a plan. When you know what you need to do and when you want to do it, the task becomes much less intimidating. Break your task down into smaller, more manageable chunks, and write down when and where each piece should happen. This way, even if you don’t start working on the entire project right away, you at least know where you stand.
2. Set deadlines. If making a plan isn’t enough to get you moving, imposing deadlines can help kickstart your motivation. Set yourself some tough but achievable goals, and then work towards meeting them as quickly as possible. Not only will this help assuage any fear of failure, but also it will give you something tangible to aim for once you start working on the project in earnest.
3. Get support. If working on your taxes feels like too much work alone, enlist the help of a professional or family member who can give you sage advice and moral support throughout the process. Being able to lean on someone else can really help to take the pressure off.
4. Take a break. Sometimes the best way to overcome procrastination is to take a break altogether. If you find yourself struggling to focus on your task, take a few minutes to relax and clear your head before getting back to work. This may require some creative scheduling on your part – for example, setting aside time in your day for creative thinking, but avoiding any distractions that might sidetrack you from your work.
Reacting to Tax Bills Out of Frustration
When you receive your tax bill, it can be frustrating if you feel like you’re stuck between a rock and a hard place. Here are four deadly sins of dealing with tax bills you can’t afford:
1. Greed: Trying to figure out how to get around paying your taxes is one way to cope with stress. But if all you focus on is getting out of paying taxes, you’ll eventually give in to greed and try to find ways to dodge or cheat the system. This will only make things worse in the long run – not to mention increase your tax bill even more.
2. Sloth: If you don’t want to deal with your tax bill, then just ignore it – but that’s not going to help much. Eventually, the IRS will catch up with you and force you to pay what you owe. In the meantime, by not paying your taxes, you’re putting yourself at risk of incurring additional penalties and interest charges.
3. Wrath: Making angry phone calls or sending threatening letters to the IRS isn’t going to get you anywhere – and it could backfire on you big time. Not only can this lead the IRS to further investigate your case, but it could also lead them to believe that you’re not willing or able to pay your taxes – which could result in harsher penalties being levied against you later on down the line.
4. Envy: When it comes down to it, most people simply don’t have the money to pay their taxes on time – no matter how much they might want to. This can lead to feelings of envy and frustration, which can only make it harder to deal with your tax bill.
Neglecting to File Your Taxes on Time
If you haven’t filed your taxes yet, it’s time to get moving. Here are four deadly sins of dealing with tax bills you can’t afford:
1. Neglecting to file your taxes on time. This is the most common mistake taxpayers make, and it can lead to huge penalties and interest charges. If you don’t file by the deadline, you may have to pay a late filing fee, which can be as high as $135 per return. And that’s not all – if you owe more in taxes than you can afford to pay, the IRS may seize your assets to cover the bill.
2. Filing an incorrect return. If you make even one mistake when filing your return, the IRS may consider that a criminal act and subject you to stiff penalties, including imprisonment. So be sure to enter all of your correct information on every page of your return and check each box correctly.
3. Not paying your taxes on time. If you don’t pay your federal or state income taxes on time, the IRS will impose interest and penalties on top of the amount you owe – in some cases, these amounts can exceed the amount of the original tax bill! And if you don’t pay off your balance by April 15th of every year, the IRS will turn around and charge interest on that entire amount from April 16th onward. That means that outstanding debt could balloon quickly and cost you a lot of money.
4. Filing for bankruptcy. If you can’t afford to pay your taxes and you’ve tried to resolve the issue through normal channels, the IRS may decide to pursue collection action through the courts. This could result in hefty fines, seizure of your assets, and even imprisonment. So if you have any unpaid taxes, it’s best to get them taken care of as soon as possible – preferably before your financial situation gets worse.
Filing an Extension
If you’ve been struggling to pay your taxes, filing for an extension may be the answer for you. Here are four reasons why filing for an extension may be the best option for you:
1. You may not have enough money to cover your tax bill this year. If you don’t have enough money to pay your taxes this year, filing for an extension could allow you to put off paying until next year. This can give you some breathing room and help ensure that you can afford to pay your taxes when the time comes.
2. You may not be familiar with all of the options available to you in terms of paying your taxes. Filing for an extension gives you more time to research different payment options and figure out which will work best for you financially.
3. You may need more time to prepare your taxes. If you’re anticipating a large tax bill this year, filing for an extension could give you enough time to get a grip on the information and paperwork needed to file correctly.
4. You might not have received all of your tax bills yet. If some of your tax bills haven’t arrived yet, filing for an extension could mean that they eventually will – which would mean that they won’t be due until after the deadline has passed (assuming no other issues arise).
Whether or not filing for an extension is right for you largely depends on a few key factors – such as how much money you think you’ll owe and whether you feel comfortable waiting until the deadline has passed. If you think you might not be able to pay your taxes on time, it’s always a good idea to speak with an accountant or tax preparer to get their opinion.
Final Thoughts
If you’re facing a tax bill that you cannot afford, it’s important to take action as soon as possible. Ignoring the problem will not make it go away, and the longer you wait, the more difficult it will be to find a solution. first, try to negotiate a payment plan with the IRS or your state tax agency. This can allow you to make smaller payments over time and avoid penalties and interest.
If you’re unable to negotiate a payment plan, consider seeking help from a tax professional or nonprofit organization. They may be able to help you find a solution or negotiate a settlement on your behalf.
Lastly, if you’re still unable to afford your tax bill, you may need to consider more drastic measures such as selling assets or taking out a loan. While these options may be difficult, they may be necessary in order to resolve your tax debt and protect your financial well-being.
