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TAX DAY-NEWSONE

Come inside of my “Lifestyle Lounge” with life coaching tips for “Income Tax Day.”

The deadline for filing our income tax is midnight tonight. For many this is a day when the stomach is just one big ball of nerves because either you are getting a tax refund back or your tax refund turned into a big tax bill. If that’s the case:

Keep calm
 Resist the urge to stick your head in the sand and hope the IRS will just go away. They won’t, and avoiding the problem will only make it worse. To minimize the damage, file your return and send as much money as possible. By sending your paperwork, you’ll avoid steep penalties imposed for the failure to file a timely return.

Trading debt for debt You can get the IRS off your back by coming up with the money using your credit card or some other form of consumer loan, like borrowing against your home equity. Of course, borrowing to pay your tax bill will only transfer your debt from one place to another, but it will keep the tax collectors at bay.

Negotiate at the source If you’d rather deal with the IRS directly, you can. Virtually anyone who owes less than $25,000 in taxes, penalties, and interest can request an installment agreement.

Making a choice
 The IRS maintains that it’s less expensive to pay your taxes by credit card or by borrowing against your home, real estate, or other investments. In part, that’s because the IRS keeps levying interest and penalties as long as you have some unpaid tax debt left outstanding. However, the interest rate charged by the IRS may be lower than the interest rate imposed by your credit card. You’ll have to do some math, and some soul-searching, to decide which option makes the most financial and emotional sense.

Thank you for coming inside of my “Lifestyle Lounge” where lives are changed!

Photo Credit: NewsOne

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