No date strikes fear into the heart of Americans like April 15 — tax day! And for those who owe Uncle Same and are unsure of how to pay him, that feat can be overwhelming. However, the National Foundation for Consumer Credit (NFCC) wants consumers to know that help is available.
“First off, if you own, don’t panic,” says Durant Abernethy, president, NFCC. “Instead, review your situation. Maybe you can take out a loan or find ways to save between now and April 15. Or, you can work out an installment plan with the IRS.”
Counselors with NFCC-member agencies work with consumers to help them establish a budget and work out a repayment plan with creditors, including the IRS. Says Abernethy,”The IRS has authorized NFCC members to work out installment plans for delinquent federal income taxes. Through these plans, consumers make manageable regular payments instead of being hit with an overwhelming lump sum.”
NFCC offers these tips for consumers who think they might own taxes this year:
Calculate your taxes sooner, rather than later. Reciew last year’s return and compare 1996 expenses and income. By computing your taxes early, if you own, you still have plenty of time to figure out how you are going to make the payment.
Check your deductions. Check out tax-preparation books at the library. Many people miss out on deductions because they are not aware of them. Tax-Preparation software can help as well. In addition, the government offers tax preparation assistance in most community called VITA (Volunteer Income Tax Assistance). To located a VITA site close to you, call 1-800-829-1040. In addition, the IRS offers tax tapes accessible by calling 1-800-829-4477.
Decide how to pay. Depending on the amount you owe and your financial situation, decide whether you should use savings or take out a loan. Using Money from savings may cost less that paying interest on a loan. Make sure that if you decide to borrow, that you shop around for the lowest interest rate.
Cut Expenses now. You still have time to save for an April 15 tax payment by reducing your daily spending. Cut down on optional expenses such as entertainment and new clothes. A simple spending reduction like bringing your lunch to work instead of buying it can mean $225 saved over nine weeks.
Always file. The IRS considers filing you tax return on time and paying you tax bill as two separate items. Even if you can’t pay, make certain you file on time. You significantly reduce the penalties you will incur.
Investigate payment installment plans. NFCC’s member agencies can help you work out a repayment plan with the IRS. A counselor will receive your income and living expenses and develop an installment agreement with the IRS. You will still owe any penalties and interest.
For help with budgeting for taxes or reducing debt, contact an NFCC member agency. The National Foundation for Consumer Credit is a non-profit membership organization whose purpose is to promote the wise use of credit through education and counseling. NFCC serves as the umbrella group for 200 member services operating nearly 1,200 counseling offices throughout the United States, Puerto Rico, and Canada.
The telephone number of the nearest NFCC member may be found in the business pages of the local director under “Consumer Credit Counseling Service,” or by dialing 1-800-388-2227. Spanish speaking consumers can call 1-800-682-9832. Consumers can also learn more by visiting the NFCC Home Page at http://www.nfcc.org.