Tax season is here, and if you are like many Americans, the thought of paying your taxes might make you nervous. If you don’t have the funds available to pay your taxes now, you may be wondering about what your options are. One option for paying your tax debts is a tax loan which offers competitive interest rates and short terms. Continue reading to learn more about how you can use a loan this tax season.
Penalties for not paying taxes
While tax evasion is a serious criminal offense, failing to file your tax return or pay your taxes on time also causes severe expenses and fines. By failing to file your return or pay your bill on time, you could face high-interest rates on the outstanding tax balance and a monthly late fee. Paying your taxes late causes a penalty of 0.5% of your unpaid taxes per month, adding up to 25% of what you owe. The cost for not filing your return on time is generally even higher, at up to 5% of your unpaid bill each month.
Options for paying off taxes
Taking those expensive penalties into consideration, it’s a much smarter idea to pay off your tax debts on time rather than face the consequences of high interest rates and fees. However, if you don’t have the means to pay off your tax debts right now, there are few options to help you. The IRS offers short-term and long-term payment plans for individuals that need additional time to pay off their taxes, but there are application fees and high interest rates associated with these agreements. Another option is to receive a short term tax loan from a private lender, which generally offers lower interest rates and fewer fees.
Benefits of using a tax loan
Using a tax loan is a great solution for those in need some of additional help paying off their taxes. As mentioned above, private lenders typically offer much more competitive rates in comparison to signing up for a payment plan with the IRS. Another great benefit of using a loan is that you can pay off your taxes all at once, rather than re-paying the IRS over a longer period of time. By paying off all of your taxes before the April 15th deadline, you can avoid worrying about any of the fees associated with late payments. You will be able to sleep soundly at night knowing that you have no debts to the IRS that could be damaging to your credit.
Where to find a tax loan
You can receive a tax loan from banks, credit unions, and online lenders. These organizations offer competitive loan rates based upon factors including the borrower’s credit history and income. From now until April 15th, CTFCU is offering tax loans at rates as low as 9.99%. With loans up to $5,000 and terms at 12 months, a short term tax loan is a great way to repay your tax debts and be worry-free. Visit our promotions page or stop by our office to learn more about whether a tax loan from CTFCU is the right choice for your financial needs.