Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Finding the cash to pay a larger-than-expected tax bill can be tricky, but tax pros say there are ways to deal with the surprise without having to pawn the family heirlooms.
“That way, you’re not going to be subject to failure-to-file penalties — because they are significantly higher than the failure-to-pay penalties,” warns Melinda Kibler, a certified financial planner with Palisades Hudson Financial Group in Fort Lauderdale, Florida.
If you’re not done preparing your return, by April 15. But take note: An extension gives you more time to file, not more time to pay.
» MORE: Try our
Because the IRS charges interest and , sending even a little money with your tax return is better than sending nothing.
“If you can pay down more now, that means less interest and penalties as you scrounge together the rest of the money to cover the bill,” Kibler says.
Check out your credit report for free — anytime. We’ll help you keep track of any changes.
Not many people , Portera says, but they can show the IRS you’re making an effort to pay what you owe.
Set up a plan that leaves you with some financial breathing room in case life gets in the way and you need cash for emergencies, says Lew Hurwitz, an enrolled agent in Petaluma, California. You can always send extra money if you have it, he notes.
For many people, avoiding a surprise tax bill can be as simple as , which they give to their employers instructing them on how much income tax to withhold from their paychecks. Increasing the amount withheld can help set aside more tax money for next year — “so you're not in the hole,” Portera says.