Why Pay Tax Debt Early

Posted on June 21, 2022

Why Pay Tax Debt Early

The payment of tax debt, if not made early, can increase the total amount of back taxes because of the interest and penalties the IRS charges monthly. Taxpayers who are unable to pay their entire tax debt amount can reduce their back taxes by paying as much as they can before the filing deadline.

Even if taxpayers are not able to pay their taxes on time, they must make efforts to pay the tax debt as early as possible to reduce the overall amount of interest that is charged. Paying the tax debt early also helps avoid aggressive collection actions by the IRS, such as a lien or a levy.

The postponement of tax debt payments will accrue monthly interest and penalty charges, which can substantially increase the total debt amount. Therefore, taxpayers should make immediate efforts to successfully resolve their back taxes.

It is important to consult tax experts before applying for tax debt payment programs. Taxpayers who can pay their entire back tax amount in full do not need to hire tax help. Taxpayers who need to apply for an IRS debt payment program may want to hire a tax professional who can assist them in preparing their tax case and represent them before the IRS.

Early payment of tax debt is the best method to avoid increasing the tax debt amount. Even if taxpayers cannot pay anything on their back taxes, they can still resolve their tax issue with the IRS.

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