By now, everyone knows that a lot of taxpayers are getting the worst news ever at filing time. They owe the U.S. Treasury money. We can debate the reasons for the unexpected tax bills ad infinitum. Withholding tables were rejiggered in 2018 following the changes in the Tax Cuts and Jobs Act (TCJA). Itemized deductions and exemptions were reduced or eliminated by that tax legislation. Taxpayers didn't adjust their withholding to get their paycheck amounts more in line with the new law. The bottom line is that more than the usual number of filers this year are going to have to come up with money to pay their taxes when they file. Many of them have never been in this predicament before. To help these folks out, the Internal Revenue Service has some suggestions. Make a lump-sum payment: If you're tax bill isn't too big and you can cover what you owe in one payment, the IRS offers a variety of payment options, many of them of the electronic variety. They include:
Regardless of what method you use to pay, make sure you get it to the IRS (or postmarked if mailing) by the April deadline(s). Pay in installments: If, however, your tax bill is too big for you to pay in one fell swoop, the IRS also offers some ways to pay over time. They include:
Remember, too, that you don't have to deal only with the IRS to set up a payment plan. You also should look into getting a loan from a private lender to pay the amount due. In many cases, the loan costs may be lower than the combination of interest and penalties the IRS must charge under federal law in connection with its installment payment arrangements. Adjust your withholding: Finally, so that you won't find yourself owing, or at least not so much, this time next year, adjusted your payroll withholding. Now. The IRS has a new Form W-4 you can use to ensure that the amount of income tax taken from your paychecks will match up properly with all the TCJA changes. When you file your 2019 tax return in 2020, you'll be glad you did. You also might find these items of interest:
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