I have seen people say they can just wait to get this year taxes taken out of next years. Is there a benefit to doing it that way other than not having to set up a payment plan or anything? I only owe $1650. I can't create a payment plan yet but am throwing $150 a month at it right now (this paycheck coming up.) When can I create a payment plan, or am I better just leaving it to next year if I know I will get a refund next year? Is that the same for state (Missouri, owe $1250)? I have never owed before so not sure how this all works! Thanks y'all!
Better To Pay Taxes This Year or Let It Come From Next Refund?
byu/Important-Fig-7002 intax
Posted by Important-Fig-7002
4 Comments
Pay for it as you go. The IRS does not like to wait, and will charge you interest on money that’s outstanding.
If you don’t pay, the irs will charge you interest and penalties, so you’ll end up paying more overall if you wait until next year
Pay it ASAP. Taking it out of next year’s refund is dumb in multiple ways: You give IRS a year of late-payment penalties and interest. You have to pay extra during this year to generate the refund that will pay the old bill, when you could instead just pay that money against the outstanding balance. Whoever “people” are, stop listening to them.
The “I’ll pay it out of my refund next year” payment plan isn’t a thing. That’s happening automatically whether you have a formal agreement in place or not.
Without a formal payment plan, you may be subject to enforced collections like a bank or wage levy.