What to Do if You Cannot Pay Your Taxes

If you owe taxes this year and cannot afford to pay the full amount, there are options that you can take to ensure that you will not incur late filing penalties. The best option is to pay as much as you can by the deadline. While you will still incur late payment fees, you will not be penalized for filing late. For more information about this option and to learn more about the possibility of an Installment Agreement, read this C.P.A Insight.

Exceptions to the 10% Early Distribution Penalty

If you take a distribution from a retirement account before you reach the age of 59 1/2, generally, you will have to pay a 10% early distribution penalty. However, if you take an early distribution to pay for unreimbursed medical expenses or qualified higher education expenses, you may be able to avoid the early withdrawal penalty. For other common exceptions in which you may not be subject to the 10% penalty, read this C.P.A. Insight.

Recordkeeping for Individuals

When gathering your previous year’s tax information or planning for the current year’s taxes, it is important to consider how you keep your personal records. Some basic records that everyone should keep include: W-2 Forms, bank statements, invoices, insurance records and various investment information. For more information on which records are vital to keep and organize for the tax season, read this C.P.A. Insight.