Have a Tax Question? Ask a Tax Expert
Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.
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The IRS does have payment plans, but penalties and interest continue to accrue on any balance. So, if you can secure a home equity loan to pay your delinquent taxes, that would be a better bet
That way you are square with the IRS and then have a longer payment schedule to pay off the balance.
Well, as you might assume, i could be better. I just found out I will be about $60K short for IRS taxes in the next 3 weeks.
I'm sorry to hear that. The home equity loan would be a better option to pay, because penalties and interest will not continue to accrue
Could i do part home equity and part IRS plan if i need to?
The IRS is very flexible.
They just want to get paid, that's all.
How does the IRS address interest and do you know the interest rate?
Let me look the interest rate up. They accrue interest on the unpaid tax.
Thank you, XXXXX XXXXX wait...
It's currently 3% for underpayments...so not too bad
That may be less than a home equity line. Do i automatically qualify for an IRS payment plan? I may be better than going through the app process and credit process for a home equity line. Thoughts?
Well, $50,000 is the threshold for automatic approval.
So if you could pay down the tax debt to $50,000 you would automatically be approved.
If not, then you would go through the application process.
Thanks, XXXXX XXXXX that is the answer i was looking for. Perhaps i can pull $16K out of home equity and the balance with the irs..
Sounds like a good plan. I wish you the best of luck.
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Thank you for the time and assistance. I am all set for now. have a good evening.