Do You Owe Money on Your Taxes?

Last year, my husband and I were shocked and horrified to find out that we owed almost $1000.00! Every year prior, we had received a big refund check, so to find out we owed so much was devastating. A thousand bucks might not sound like a lot, but on our small fixed income it was a fortune. If you too have been devastated to hear you owe money this year, remember it's not the end of the world. Here are a few simple steps to keep Uncle Sam from crushing your spirit, as well as some tips for fixing the problem and coming up with the money.

Step One - If you did your taxes yourself, consider seeing a professional.

If you are not an experienced accountant, and you did your taxes yourself (even with a program like Turbo Tax), consider taking the information to a professional tax consultant/financial advisor to see if they can help. Explain the situation. These people know all the ins and outs of the system and may be able to help you think of legitimate deductions you had not included.

Step Two- Remember that you have until April 15^th.

Once you have the final figures on how much you owe, remember that you do not have to pay right away. Even though tax services like H&R Block will offer to help you eFile right at their office, you do not have to do this. You can wait until April 15^th to get together as much money as possible, which by all means you should.

Step Three- Make the next few weeks until April 15th about coming up with as much as possible.

Don't just immediately turn to credit as a means of paying your income tax debt. Try to gather as much as you possibly can to send to IRS, without tapping into credit cards or home equity. There are all sorts of ways you can make extra cash, which are discussed later in this article.

Step Four- Don't even consider lying!!!

Lying on your taxes is bad news! Do not try to make false adjustments to your taxes to fix your problem. The people at IRS are trained to recognize anything suspicious. There is a good chance that you could get caught. Even if you have unintentionally made a mistake, they will most likely catch up to you within a couple of years. If they think you have intentionally altered your figures, then you will probably get audited. This is really not a chance worth taking.

Step Five- You can work out a payment plan for the rest of the money you owe.

After gathering together as much money as possible, if it turns out that you still owe more than you can come up with, then don't panic! You can try for an extension of up to 120 days, or you can work out a payment plan. The IRS does offer some fairly decent installment agreements. You can even divide the amount of two years, instead of one year. Then, you can change your W4 to have more taxes taken out this year, so that by next year you might not even have to keep paying. More information and links to the necessary forms can be found in this article on the IRS website: http://www.irs.gov/taxtopics/tc202.html

Step Six- Change your W4, so that this doesn't happen next year.

Keep in mind that the same thing is likely to happen next year, unless something changes. So, if you plan to keep the same job, then you will want to see your manager or HR rep about claiming less withholdings on your W4. You can even print out the form on the IRS website and just bring it in to your employer. Even if something in your life is going to change (i.e. you are pregnant or going back to college), it might still be a good idea to claim less withholdings. Better safe than sorry, right?

*** How to Get the Extra Money You Need ***

There are many ways to make some extra cash. Based on personal experience, here are some quick and easy methods of money making.

Focus Groups

Marketing companies hold focus groups on a regular basis to find out what consumers are looking for in regards to specific products or industries. Focus groups usually only take a couple of hours, and they pay anywhere between $50 and $200.

To find a focus group to participate in, go to your local Craigslist website. You can find the one nearest you by visiting the craigslist main page. Click on "gigs." Then, type "focus group" into the search field at the top. You will probably get a good list of opportunities. You might also want to try the words "market research." You can also just browse through the entire section, but this is the easiest way to find the pertinent information. (Note: For the most part, avoid anything with the word "survey," and anything internet based. Pay-per-internet-survey deals are usually advertising scams.)

Plus, the cool thing is, once you go to one of these focus groups, they will ask you if you are interested in participating in future focus groups. I get calls on a regular basis from companies I have done focus groups with. It is nice to have the spending money.

Garage Sale

Look around your house to see what stuff that you could get rid of, and then hold a garage sale. Tell friends and family members about the garage sale to see if they have anything they want to get rid of. (Remember to remind them that you are willing to sell it at your garage sale, but only if they just want to get rid of it. There is nothing more frustrating than having to give someone else money from a garage sale that you publicized, set up, manned, and cleaned up).

Make sure you publicize well, but only pay for advertising if you have big ticket items to sell. Paying for a garage sale ad when you are just selling clothes is silly. The ad will probably cost more than you will make. You can list the sale for free on Craigslist, and signs do wonders!

eBay

If you have things that you want to get rid of that are a bit better than garage sale material, consider selling them on eBay. Good examples of this are jewelry, collectibles, movies, books, etc. Things that are light and easy to ship are best.

Spare Change

If you have spare change jars lying around the house, then it is time to cash them in! Make sure you also check anywhere else that could have change... such as the bottom of your purse, your couch cushions, car, etc. It may sound silly to be digging for spare change when you are trying to get hundreds or thousands of dollars, but every little bit counts. Really!

If you can avoid it, don't use a CoinStar or other counting machine that charges money. Check with your bank to see if they have a machine that you can use without a fee. Even if they don't, they will probably give you some free coin rolling papers. You could make an evening of it- watch a movie with your family while rolling pennies together!

Aluminum Cans

If you don't already, start saving your cans and bottles for recycling. Your paid redemption value when you bought them, so you might as well get it back.

Make Some Budget Adjustments

Draw out a detailed budget of where your money goes each month, and figure out if there are some things you can cut back on temporarily- at least until your taxes are paid off. Things like bringing lunch to work instead of eating out, or renting movies at home instead of visiting the theatre, can really add up! If you belong to a gym, see if there is a way to put your membership on hold for a month or two. Call your cell phone company and see if they are offering any special deals on new plans. You might have to sign a new contract, but if you are happy with the service, it might be worth the savings. As you do these things, try to deposit the money you would have spent into the savings until April 15^th.

Ask for Overtime

If you have the type of job where it is possible to work overtime, see if you can put in just a few extra hours each week. The few extra dollars on the paycheck might not seem like a lot, but again, every little bit helps.

Associated Content

If all else fails... write like crazy! Associated Content might not be a way to earn big bucks, but if you can write some decent articles, the pay will add up quickly!