We’re only a few weeks from the end of the year, and come the new year, it will be tax time. A time most people dread. But those who face an unexpected tax bill may have even more reason to dread mid-April. After all, what should you do if you don’t have the money to pay the tax man?
First, make sure to still file your return. Investopedia recommends facing your tax problem because avoiding it will likely only end up costing you more in penalties and fees. File your taxes and come up with a strategy to pay your debt.
How? Consider these options:
1. Sell stuff you don’t use anymore. Do you have a diamond ring, bracelet, or necklace that you no longer like or wear? Why not sell it through a reputable seller like White Pine Diamonds? You’ll receive payment the same day, giving you immediate money to apply to the debt. Another option is to sell other valuable items on sites like eBay or Craigslist. Get rid of as much as possible.
2. Take a credit card advance. This isn’t the perfect option because you’ll still have interest to pay, but at least you won’t be beholden to the IRS, and there’s a lot to be said for that!
3. Take out a loan. If you’re credit is good, you could likely qualify for a personal loan. Another option could be taking out a line of credit on your home. The loan will likely have a lower interest rate than the credit card, but you are making your home vulnerable if you can’t pay.
4. Borrow from a friend or family money. If the debt is not too large, you may be able to borrow from friends or family members. Make sure to draw up a contract and agree to pay him interest. The interest doesn’t have to be as high as what you would pay a bank, which would give you a financial break. You’re friend also wins because the interest you pay will likely be more than he would get from the bank.
If you owe Uncle Sam, don’t despair. There are ways to pay your tax bill and move on.