AICCCA Says Follow the Five Fs if You Owe Taxes

FAIRFAX, VA - February 9, 2012 — For the second year in a row, tax day falls later than normal. Income tax filing will be due on April 17 but for consumers who will owe more than they can pay in full, that day will be here before they know it. The Association of Independent Consumer Credit Counseling Agencies encourages consumers to face facts and prepare now to meet their tax obligations.

"Ignoring the situation if you owe more in taxes than you can afford to pay will only compound the situation," said David Jones, president, AICCCA. "Penalties and fees will add up quickly if you do not make arrangements to pay."

1. Figure out now how much you will owe on April 17. Putting it off will not change the amount due and knowing will help you plan for how you will make the payment. Plan to make some kind of payment on April 17 or you will owe steep penalties and fees.



2. Fine-tune your budget and determine how much you can save by cutting back on areas such as entertainment and food. Have a yard sale or take advantage of online auction sites for larger items, like boats and ATVs. Target the monies earned for your tax bill. You may not be able to save the full amount you owe, but whatever you save is that much less you will need to borrow.



3. File for an extension or file your return on or before April 17. Do one or the other even if you can't pay the full amount of your liability. Filing late will result in additional penalties and fees added to your tax bill.



4. Find the best terms if you must borrow to meet your tax obligation. Your options are a personal loan, an IRS installment plan or an IRS approved credit card. You can also apply for a short term payment extension online with the IRS for no fee if you can pay in full within 120 days.



5. Factor this year's tax liability into your withholding for 2012 to ensure that you will not be hit with a large tax bill next year at this time. If you need to, lower the number of withholdings or have your employer take an additional amount in taxes if you already claim zero on your W4.

Founded in 1993, Association of Independent Consumer Credit Counseling Agencies (AICCCA) is a national membership organization, established to promote quality and consistent delivery of credit counseling services. AICCCA and its members are focused on improved creditor relations, efficient processes and advanced technology to best serve clients and creditors. AICCCA members are independent nonprofit agencies that advocate for debtors, counsel millions of consumers annually nationwide and provide debt management services to consumers with excessive unsecured debt. For more information or to contact an AICCCA member office call 866-703-TRUSTAICCCA (866-703-8787) or visit www.aiccca.org.