A Taxing Problem

QWhat should I do if I don’t have the money to pay my taxes this year? — G.N., Opelika, Alabama A First, understand that even if you can’t pay a penny, you need to file your return on time. Failing to do so will result in penalties. So file that return — and pay as much as you can, as that will minimize any penalties or interest charges. When it comes to an inability to pay, you do have some options, which you can discuss with the IRS itself by calling 800-829-1040. The IRS may be able to offer you a brief extension, a payment installment plan or an “offer in compromise,” where it gives you the chance to settle your obligation by paying less than you originally owed. The IRS may even be able to waive any penalties, though you will still owe any interest accrued. If you’re thinking of solving your problem by charging your taxes to a credit card, think again if that debt is going to remain unpaid for a long while, racking up interest charges at perhaps 20 percent or more annually. (Credit card service providers will also charge you a “convenience” fee, which can be rather inconvenient.) A bank loan might be better, possibly charging you less than the IRS’ interest and penalties. Don’t ignore your taxes, as that could lead the IRS to take collection action. *** QWhen changing brokerages, can I have my entire portfolio transferred to the new brokerage without having to sell anything and without generating any taxable gains? — T.W., Essexville, Michigan A Yup. Your new brokerage will likely be able to help you switch seamlessly. No selling or taxable gains need be involved. Want more information about stocks? Send us an email to foolnews@fool.com.