Retirees with surprise IRS bills: Options when you can't pay in full
A surprise IRS tax bill can derail your retirement budget fast. Here's how to keep that from happening.
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms.
Retirement is supposed to be the finish line, not the starting point for a new financial crisis. Every year, though, millions of retirees open a tax bill they didn't see coming, and for many, that one bill is large enough to throw a carefully constructed fixed-income budget into chaos. After all, when your income is limited, and you're living on Social Security and carefully drawn-down savings, a lump-sum demand from the Internal Revenue Service (IRS) is less of an inconvenience and more of a threat to your financial stability.
And, the chances of finding yourself with an unexpected IRS tax bill may be even higher than normal right now. The annual IRS filing deadline is just weeks away, and ongoing shifts in tax rules, required minimum distributions (RMDs) and Social Security taxation are resulting in more older Americans discovering that their tax liability isn't what they anticipated. Add in the other economic issues, like rising living costs and tighter fixed incomes, and even a modest tax bill can quickly become a serious financial strain.
Still, owing the IRS more than you can pay doesn't automatically mean penalties, aggressive collections or financial ruin. The agency has multiple programs designed to help taxpayers — including retirees — manage balances they can't immediately cover.
Find out how TaxRise can help with your unpaid tax bill today .
Retirees with surprise IRS bills: Options when you can't pay in full