You Owe Taxes—Now What?

Tax season can be stressful, especially if you find yourself owing money to both the IRS and the Georgia Department of Revenue. The good news? You have options! The sooner you act, the better your outcome will likely be.

Step 1: Don’t Panic, But Don’t Delay! Explore IRS Payment Options

It's important to know that filing late triggers a steeper penalty (5% per month) than paying late (0.5% per month), and interest accrues daily. So if you haven't filed already because you know you will owe, go ahead and rip the bandaid off. Georgia's federal and state tax deadlines this year were pushed back from Tuesday to May 1 due to due to the hurricane due to the hurricane disaster. Pay much as you can upfront to reduce penalties and interest.

If you owe federal taxes, the IRS offers several ways to manage your debt:

Short-Term Payment Plan: Gives you up to 180 days to pay in full. No setup fee, but interest and penalties will continue to accrue.
Long-Term Installment Agreement: Allows monthly payments over time. You can apply online or by submitting IRS Form 9465.
Offer in Compromise: Settle your tax debt for less than you owe if paying in full would create financial hardship.

You can manage your IRS account, view balances, and apply for payment plans by visiting IRS.gov/account.

Step 2: Handle Georgia State Tax Debt

The Georgia Department of Revenue also provides relief options for state tax debt:

Payment Plans: Request an installment agreement through the Georgia Tax Center (GTC).
Offer in Compromise: Settle your Georgia tax liability for less than the full amount owed if you qualify financially.

You can view your balance, make payments, and request relief options through the GTC portal.

Step 3: Know Your Rights and Resources

If you’re unsure where to start or need help navigating the process, consider this resource:

IRS Taxpayer Advocate Service: Offers free, independent help for taxpayers facing financial hardship. Check out the website https://www.taxpayeradvocate.irs.gov/

Owing taxes isn’t the end of the world, but ignoring it can lead to wage garnishment, tax liens, or seized refunds.Take action early, explore your options, and don’t hesitate to seek help if needed.

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