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If you owe money to the IRS is it better to pay by credit card or paying penalties to the IRS?
First, let me emphasize that you should file your tax return on time whether or not you can pay your taxes on time. The penalty for failure to file on time is TEN TIMES the penalty for failure to pay on time. File on time even if you can't pay.
The IRS failure to pay penalty is 0.5% per month or partial month as long as the taxes remain unpaid. That works out to an APR of roughly 6% per year. (It's actually a little more since you get charged the full amount for even a partial month.) In addition to the failure to pay penalty, interest is added. The interest rate is a variable rate that changes quarterly. It is currently 4% per year, accrued on a daily basis.
Once the IRS sends you a notice of intent to levy, the failure to pay penalty goes up to 1% per month, roughly equivalent to 12% per year.
So interest plus penalties add up to 10% to 16% per year. If your credit card rate is less than that, it is obviously better to pay by credit card. And don't forget credit card cash back and bonus miles and other perks in your calculation. A lot of credit cards are still offering promotions like 0% for the first twelve months for new applications. I still get convenience checks from my existing credit cards offering 3.99% for a year or more. Look into these offers.
If you don't pay the IRS, sooner or later in addition to the penalties, they will start to threaten other enforcement action, such as levying your bank accounts or paycheck. Once they start doing this, you need to pay them off. Responding to IRS notices is quite expensive for your employer, it can kill your career. Even if they aren't supposed to retaliate officially, you can bet that the next time there is a review, you will be passed up for a raise or promotion for some other reason. Having your bank accounts frozen can also be a downer. The bank will charge you a big fee, all your checks will bouce, which will cause everyone you paid to also charge you fees and cancel your credit, and so on.
It is also possible to request an installment agreement from the IRS. A set up fee of $43 to $105 applies, plus all of the above penalties and interest still apply. However, if you keep up with the term of the agreement, it will avoid collection action. See:
http://www.irs.gov/businesses/small/article/0,,id=108347,00.html
What else can I help you with?
Why aren't utility bills reported to credit agencies if they are paid on time?
Utility companies are not credit grantors. You are not borrowing money to be paid back in a specific time period. You are paying for a service when you pay your utility bill.
Do you have to pay a credit card which accrued a balance of over 200 dollars if there were no purchases made?
Afraid so..this is how credit card companies make "easy" money. By charging a non-usage fee. Then, if the fee isn't paid, late penalties and interest continue to add up.
What are some examples of common credit card services?
Credit Card services that you can expect to see as being common are points that you can save up for items or travel as well as being a lot more convienent instead of paying money out right.
When you deposit money to 1 account is it a debit or a credit?
it is a credit. Depositing money into an account is putting money in.
What does debit and credit mean?
Debit is when they take from your bank. A credit is money paid into your account. But the other meaning of credit is the ability to borrow money. The more money you make and the more you use your credit and pay it off, the more credit you get.
Can you sue your absent husband for not paying a credit card he borrowed money on from you?
Can you sue your absent husband for not paying a credit card he borrowed money on, the credit card is in my name only?
Do you get a better deal paying cash or credit for a new car?
Cash, your if accidentally can not pay your credit score will tank and you will lose a lot of money now and later.
Is it better if I pay of my credit card balaces with money I have on side or if I just keep paying payments that I can each month?
The answer to that question depends on how much interest you are paying and how much interest you are earning. Almost all of the time it is better to pay off your credit cards. But if you need to borrow for something else then you need to compare interest rates before you pay offthe credit cards. But ALMOST ALL of the time paying off a credit card and not paying interest is in your best interest.
What is better Debit card or Credit Card?
I prefer debit card but if you like the bank giving you money then paying it back then it credit card for you . If you have debit card is like your whole bank in your wallet :)
How do you get rid of the money that you owe from collection agency without paying them and become good credit again?
how to get rid of the money that you owe from collection agency without paying them and become good credit again
Is it legal to download music from the web without paying for it if you give credit to the artist?
No. They want your money, not your credit.
Paying at a future date for the present use of goods and services or money is what?
Credit.
Can you get bad credit by spending to much money?
Not necessarily or at all. Bad credit comes from having bills that one does not pay or always paying late such as car payments or rent. One can obtain good credit from always paying bills as well as paying them ontime.
Can a credit card company take money out of your saving account if you are no longer paying them?
yes
Which game store gives money for old games?
Game Stop does, but it's better to get store credit because the value for store credit to money is better.
What is counter credit?
money that was paid into your account over the counter in the branch using a paying in slip.
Can you send credit from someone to someone else?
No, you can not give credit that you have to someone else. You can loan someone money or your credit card, but you are still responsible for paying the credit card company back.
