How to Pay Back Taxes

Unpaid taxes can lead to many problems, starting with financial consequences such as accrued interest charges and liens being placed on your property. Declining to pay taxes can even lead to wage garnishment or imprisonment. Paying back taxes is crucial to avoiding severe penalties and legal headaches.

Pay In Full

If you have the money to pay your back taxes, pay it in full immediately. This will spare you the cost of constantly accruing interest charges that are added to your tax bill monthly.

Pay Monthly

If you cannot pay all your taxes right away, then consider paying it down with monthly installments. You'll need to contact the IRS and apply for a payment plan. Be advised that interest charges will be added to each monthly payment.

Attempt a Settlement

If you cannot afford monthly payments on back taxes, try to apply for an try to apply for an "offer in compromise." This will allow you to pay less on your taxes than you originally owed. It is extremely difficult to qualify for this program and it requires that you have sufficiently low assets and income.