Should I pay taxes or credit card debt?
Date: Tue, 01/10/2012 - 16:49
So I prepared my tax returns for this year (I haven't sent them to the IRS yet) and I owe $3000 dollars this year.
I currently have $3000 dollars in credit card debt. All the accounts are closed and not gaining interest, but are still hurting my credit because I am not making payments towards them.
I have $3000 dollars right now to pay off either the taxes or debt.
I was thinking about paying the debt off now to help my credit and to get the creditors off my back. However, if I do that I will have to ask the IRS to extend my payment by 120 days (I need time to save up an additional $3000), which we allow me to pay the $3000 dollars I owe them by mid August of this year without any penalty or fees.
Is this a good idea? Opinions please!
Thanks!
Irs
I am not an expert by any means on this forum, but, I know the IRS takes precedence on all other debts -- remember -- they have no problems with wage garnishment -- they know where you work already -- if you are on the books --
they also have very high interest rates --- I am not that familiar with their past due situations, we usually get a refund, but since I settled this year I may be facing the same situation you are.
I always choose to take care of the IRS first. then the rest second --
again, just my own opinion
While it's true the IRS is not nice to owe money to, as long as
While it's true the IRS is not nice to owe money to, as long as you make a payment arrangement and stick to it faithfully they will not file any kind of wage garnishment nor will it go on your credit. Your payment will be based on balance due divided by 60. They charge a fee for setting up an installment agreement which is reduced for setting up a direct debit from your checking account. The form you need to request this can be found on the irs website it's called a 433D.
a couple of points
one if you get the extension the IRS will charge interest on the 3,000.00 so i don't know where you got that info from.next after that you can work to pay the credit card debt.is this one card or more than one?if more than one than you can pay each one as you get the money.just don't mess with the IRS as stated before they will charge interest and penalties so take care of them first.
The best answer is, why not both? I dont know a lot about the I
The best answer is, why not both?
I dont know a lot about the IRS, not sure if you would have to owe more before they would do this, but I know that lots of people get settlements with the IRS where they are willing to take a percentage to satisfy the taxes. I am not an attorney, but I would do some checking before you apply the money to one or the other, you might just be able to make settlement offers that both parties are willing to take. Just food for thought....
that's hard to do
for one sky the OP has to file the return to even start the ball rolling.plus the IRS has stepped up enforcement last year.unless the OP missed something in their figures and they know they owe 3,000.00 the IRS will not negotiate that down unless they can provide iron clad proof of hardship they should pay the 3,000.00 besides they might negotiate if the OP files but doesn't pay,or file an extension,or if they get one of those tax lawyers.that would most likely offset any reduction though.good points though by you.