Irs Tax Credit Car 2009
December 21st, 2008
Question: Pay high intrest credit card or the irs?
1) Have a high intrest (32%) credit card that I have worked down from $10k to $4k in the last year.
2) Also filed my 2008 taxes in October 2009 (late file) and got a bill for $2400 (penalty and intrest) from the IRS in November 2009.
3) I will have over $2500 expected return form IRS on 2009 taxes.
4) Just sold an extra auto for $2500.How should I use the $2500 from the car sale? Pay the IRS and then put the 2009 return toward the high intrest credit card OR pay the high intrest credit card and put the 2009 return toward what is owed the IRS?
Answer: I personally would pay IRS, because interest and penalties are higher with the IRS,
Then when you receive your 2009 refund send it all to the credit card company.
Another thing you can do, but of course IRS will continue to charge interest/penalties until the amount is paid in full is call IRS at 1-800-829-0922/1-800-829-8374 (which ever is listed on your letter) and tell them you request an extension to pay your balance, let them know that when you file your 2009 tax return you are expecting a refund and want the refund applied to the debt (which happens anyway, IRS always offset refund to IRS debt, child support and student loans)
They will notate your account that you have an extension, and if not full paid by your 2009 refund then you will receive another balance due notice.
Good luck!
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