“You’re not going to like this,” my husband said to me as he completed the final tally on our tax bill. When I took a peek at the computer screen, I was so shocked, I had to sit down. I knew that when we traded our full-time jobs for a life in the gig economy, we’d left the days of getting money backfrom the IRS. But I wasn’t prepared to owe thousands.
We didn’t know how to dig ourselves out of our tax debt, but we managed to do it, and we learned some valuable lessons along the way. If you’re overwhelmed by the amount you owe, here are some tips to help you rebound from a surprise tax bill.
1. Get a second opinion
First thing’s first: Assess the situation and get a second opinion. This could make a substantial difference in how much you owe, regardless of whether you’re filing yourself or have consulted a tax professional. When our CPA looked at the total we owed the IRS, he realized he could save us $2,000 on the spot. Nobody’s perfect. Getting a second opinion won’t hurt. Even if the experience only confirms the amount you owe, reaching out will give you the peace of mind that you are doing the right thing and nix any “what if?” feelings you may have down the road.
2. File for an extension
If you need more time to file your return or to research your options, consider filing for a tax extension. This can be done through IRS Form 4868 for individual taxpayers. Extensions can be filed online, and this will generate a confirmation code so you’ll immediately know the…