Academy Award winning actress Marlee Matlin is the latest celebrity in tax trouble. She owes $50,000 in taxes she didn't pay for the 2009 tax year.
"It's the reality that a lot of people in America are facing," says Matlin, whose latest gig is Celebrity Apprentice. She's one of the final four on the Donald Trump reality show with a chance to earn additional money for her selected charity, the Starkey Hearing Foundation.
In addition to being in tax debt like a lot of other Americans, Matlin is doing what many of them do: Taking advantage of an IRS installment payment plan.
"I'm paying it back. I'm not shying away from it, and I'm certainly not ashamed of it," Matlin told People magazine. "It doesn't mean I'm a bad person. It's reality. It's the reality that a lot of people in America are facing."
Matlin, who won her 1987 Best Actress Oscar for Children of a Lesser God, said it wasn't an extravagant Hollywood lifestyle that caused her to get into tax debt. Rather, being an actor and not having a steady paycheck hampered her ability to budget effectively.
To get back on firmer financial footing and pay the IRS, Matlin and her police officer husband have put their Burbank, Calif., house up for sale. The asking price, according to a Reuters search of public records, for the five-bedroom, 2,600-square-feet home is $899,000.
The couple also plans to transfer their four kids from private to public schools to save a few more bucks.
A payment plan for your taxes: If you find yourself, like Matlin, owing more in taxes than you can pay in one lump sum, check out the IRS installment plan.
The IRS has learned that when folks don't have the cash to pay all they owe at once, it's better to get incremental the tax payments. That way neither side has to spend additional time and resources dealing with liens and such.
Note, though, that there are some added costs to an IRS installment agreement.
You'll be charged a one-time user fee of $105. But you'll pay just $52 if agree to have your payments made via direct debit from your bank account. If you're in dire financial straits, you might qualify for a fee of $43
Also, penalties and interest continue to accrue to your unpaid tax bill. And the IRS still may file a federal tax lien against you, but it will be released when you pay off your installment loan.
But a tax payment plan is definitely better than just letting your IRS debt go.
So if you find you just can't pay, call the IRS and see what kind of deal you can work out to get rid of your tax debt as smoothly and soon as possible.
Related posts:
- Tax payment plans for all, including the formerly rich and famous
- Paying off your taxes incrementally
- Owe the IRS? You might be able to get 120 extra days
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