The Tax Collector Is Here: Is Getting a Personal Loan to Pay off Your Taxes a Good Idea?
Not paying your debts can land you in serious trouble and that’s why you need to pay your loan. You shouldn’t go the extra mile of an IRS tax debt. You don’t have to go there. Make a point of clearing the tax bill as soon as you can.
The confusion comes when you have no other alternatives but to take personal loans. Many people think that it’s not a wise idea. So, you should consider it.
The bad news is that you can face lots of penalties and interests that build up when you owe IRS back taxes. These things happen, and you don’t have to blame yourself. Instead, you should look at the best possible ways you can get yourself out of this.
Don’t hear it from the grapevine. Just don’t listen to the noise out there telling you taking a personal loan to clear your taxes is the worst idea. If you aren’t familiar with taxation rules, you can consult local tax professionals.
The truth is that it’s one of the best decisions you can ever make at this point in time. Just do it. It won’t harm you than the penalties you will be subjected to when you fail to pay your taxes.
What Happens to You If You Don’t Pay Your Taxes?
It’s a pain in the ass, but it happens. If you fail to pay the taxes you owe, they will cost you twofold. It means you will be charged penalties for not paying it in time.
#1 Penalties
Penalties are different. It will primarily depend on your issue. You will be penalized if you don’t file or maybe don’t pay the right amount you ought to have paid or you file but fail to pay what you were to pay.
For example, you decide to file your tax returns by correctly indicating the amount you owe, and then fail to make payments when you ought to have paid it; then you will pay a penalty of up to 0.5 percent.
The worst of all is that you will be required to pay the charge every month until you finally settle the whole month.
For example, if you owed $1,000, your additional payment will go as high as $250 every single month.
#2 Interest
To add salt to your injury, the IRS will begin to charge interest, that will compound daily, on the day you were supposed to pay your tax. It doesn’t matter whether you filed an extension. The point is that any fee should be paid on the date that it’s due. So, there are usually no excuses.
In case you didn’t know, interest rates are calculated quarterly. For example, the third quarter of a particular year can be 5 percent for your underpayments.
Nobody ever wants to incur substantial interest rates, especially at this time. So, make a point to clear your taxes as soon as you can. It will make you feel relieved.
Final Thoughts
Yes, you can take a personal loan and use it to pay your taxes before it’s too late. So what are you doing to pay off your taxes and avoid a penalty?
