Four Things to do if You Can’t Afford Your Tax Bill

The Monday, April 15 Individual Income Tax due date is fast approaching. If you expect to owe a tax bill after you’ve filed, and you’re worried you can’t pay, the South Carolina Department of Revenue (SCDOR) wants you to know that you have options.

First things first – don’t panic. Both the IRS and the SCDOR offer payment plans that may be available to you

 Here are 4 things you should do if you’re worried you can’t pay your tax bill:

• File your tax return on time. This will reduce the amount of penalty and interest you owe, which is based on the balance not paid by the due date. By the way, we mentioned the April 15 due date; that deadline is extended to Wednesday, May 1 for South Carolina returns only if filing electronically.
• Pay what you can by the filing deadline. Even if you can’t pay the full amount due, the SCDOR encourages you to pay what you can, when you can. This too will reduce the amount of penalty and interest you owe.
• Consider entering into a payment plan with the SCDOR. If you’ve received a notice informing you of a tax bill, you may qualify for a payment plan with the SCDOR. To be eligible:
  • You must not have an active levy or garnishment with the SCDOR.
  • You must have an eligible bank account.
  • You must first receive a notice indicating that you owe a balance.

I​f you are already on an approved payment plan with the SCDOR, you may be able to add your liability to the existing plan using the FS-147. Learn complete eligibility requirements and request a payment plan at dor.sc.gov/payplan.

• ​​Research other options to help you pay what you owe. Your bank or another financial institution may offer lower interest rates and better terms than the SCDOR.

Here are 3 things NOT to do if you can’t afford your tax bill:

• Do not delay filing your return. Avoiding your tax obligations will not cause them to disappear. Filing on time will reduce the amount of penalty and interest you will owe.
• Do not wait to begin paying your bill with a payment plan. Pay as much as you can by the April 15 due date so the interest charged on your balance going forward is lower. We have tips to help you make a payment to the SCDOR.
• Do not enter into a payment plan with the SCDOR or the IRS without first doing your research. Compare your options, such as a loan from your bank, to find out what works best for you.
  • The IRS has additional tips that can help you weigh your options if you owe a balance on your federal return.

To prevent future tax bills, take time to determine what caused the bill, if it was unexpected. You may need to adjust your withholding, make quarterly estimated payments, or increase the amount of your estimated payment.

Remember, when it’s time to file, the SCDOR encourages you to choose the electronic filing option that’s best for you. Visit dor.sc.gov/iit-filing to learn more.