Whether you're self-employed or have a salaried position, being blindsided by an unexpected (or an unexpectedly high) tax bill is something that is likely to occur, prepared or not for such an expense. If you haven’t prepared for an unexpected tax bill, we're here to help.

In this guide from Carolina Title Loans, Inc., we will detail seven ways to cover your tax bill, including setting up installment plans, claiming hardship, or using your emergency fund. We will also review how a fast title loan in SC can work to help you afford unexpected tax expenses.

7 Ways To Cover Unexpected Tax Bills Quickly

Any unforeseen expense throws a wrench in your financial works — and tax bills are no different. You may assume your employer takes out enough taxes to cover what you owe, but that may not be the case. It can be especially tricky if you work as a freelancer. You may file your taxes in the first quarter of the year and find that you owe.

If you wait until closer to the April 15^th tax deadline to file, you may be looking at needing to afford thousands in tax expenses soon. No matter how much you owe, it's important to devise a payment strategy quickly to avoid the often hefty IRS late fees.

Here are seven ways to cover what you owe in taxes:

1. Request An Extension – Get Up To 180 Extra Days To Pay Your Taxes

If your financial situation is extremely difficult, you can request a payment extension from the IRS. You can get an extension of up to 180 days by using the Online Payment Agreement application on the IRS website. However, be prepared to demonstrate that you'd suffer a substantial financial loss (such as selling a property at a sacrifice price) if you were made to pay your tax bill on the due date.

Once you file for an extension, the IRS will put you on a repayment plan. If you owe less than $50,000 in taxes, penalties, and interest, you can enter into an installment agreement. 

2. Set Up An Installment Plan – Pay Down Your Taxes Every Month

Depending on your tax circumstances, you have several ways to pay.

When you cannot afford to pay the bill in full, pay as much as you can and attach an Installment Agreement Request (known as Form 9465) to the front of your tax return. The IRS notes that you have several options: a short-term payment plan (180 days or less) or a long-term payment plan (paying monthly via an installment agreement).

To qualify for these installment plans, you must meet the following requirements:

• If you owe $50,000 or less in tax, interest, and penalties, and have filed all necessary returns, you can request a long-term payment plan.
• If you owe less than $100,000 in tax, interest, and penalties, you can request a short-term payment plan.

Even with an extension and an installment payment plan, you may still struggle due to a rough financial stretch. In this case, you may be able to get economic relief by claiming hardship.

3. Claim Hardship – Lower Your Tax Liability For Easier Payment

Claiming hardship is an option when you're having a tough financial year. You will need to prove your tax hardship to the IRS for relief by submitting details of your monetary circumstances and hardship to the government via a "hardship request" utilizing Form 433A/433F or Form 433B. The former is for individuals or self-employed people, while the latter is for partnerships and corporations.

Here’s some of the information you’ll need to provide to claim hardship:

• Your full name
• Date of birth
• Marital status
• Home address (street, city, state, county, and zip code)
• Phone number
• Social security number
• Spouse information (if applicable)
• Dependent information (if applicable)
• Employment information
• Personal asset details
• Self-employed information (if applicable)

If you apply and the IRS deems that paying your taxes would leave you unable to afford basic expenses, they will halt collection activities. It will allow you to lower your tax liability to make it more manageable based on your income. It can also eliminate late fees if you suffered an unavoidable event, such as severe illness, disaster, or losing your job.

4. Use Your Emergency Fund – Avoid Missing Tax Payments With Your Savings

If you have an emergency fund, your unexpected tax bill is a good time to use it. While you probably thought about holes in your roof or an unforeseen medical issue when creating your emergency fund, tax bills can present a similar emergency.

Financial experts suggest saving 3-6 months’ worth of income in a rainy-day fund to afford unexpected costs you can’t fit into your budget. You can avoid borrowing money from loans, missing taxes (and incurring late fees), or otherwise penalty-inducing options by taking money from your emergency pot.

5. Update Your W-4 – Prevent Future Surprise Tax Bills

If you're employed, you can go to your payroll department to fill out a new Form W-4. Your employer uses the information you provide on the form to withhold taxes from your income. 

While it won't remove the tax bill you're facing, it can reduce the possibility of an unexpected tax bill the following year. Owing the IRS additional taxes at the end of the year means the amounts your employer deducted from each paycheck were insufficient. Thus, updating information via Form W-4 can benefit you in the future.

6. Use Your Employer's Benefits – Use Employer Options To Fund Emergency Tax Bill

Don't overlook your employer's benefits when it comes to funding your tax bill. Many companies offer employees stock options alongside 401(k) matching. If you've been with the same employer for several years, you may have company shares you can immediately cash out to cover your bill. 

Generally speaking, you won't face penalties for accessing your shares. However, it's worth noting that they will be classed as taxable income on your next return. Something similar can be done if you're in the process of negotiating the terms of a new role. Request a signing bonus or a short-term incentive bonus to cover the costs of your current tax bill. 

While the above-mentioned methods can help you delay a tax bill, you may want an option that can help you quickly fund the emergency right away. If you don’t have employer benefits or an emergency fund, you can get the money you need with tax bill loans in SC from Carolina Title Loans, Inc.

7. Get A Fast Title Loan In SC – Borrow Emergency Cash For Taxes

When all other options fail, you can turn to a fast title loan in SC from us at Carolina Title Loans, Inc. Our title loans are designed to give you the money you need quickly, without putting you through seemingly endless processes or arduous wait times. So much so that you don't even need a good credit score to gain approval!

With a title loan from us, you can borrow between $601 and $15,000 to cover your tax bill, based on the value of your vehicle. We place a lien on your title to secure the loan, and you can continue driving your car, truck, or van as normal while you repay. You must own your vehicle outright to get approved.

Here are the required items you’ll need to get approved:

• Identification — Our customers tend to use their driver's licenses to satisfy this requirement. However, we accept all kinds of primary identification that displays your full legal name, photograph, and date of birth, including passports and student ID cards. Just keep in mind that you must be at least 18 years of age to gain approval. 
• Lien-free title — You must own your vehicle outright to qualify. Your lien-free title proves this. Please make sure the name on the title matches your name (i.e., the one on your identification). If the title isn't in your name, you will need to request a transfer at your local DMV office before requesting a title loan. Once the transfer is complete, you can start the process.
• Vehicle — We accept cars, trucks, and vans. We do not work with other vehicles, such as motorcycles, boats, tractors, trailers, or RVs. We will look at its age, make, model, condition, mileage, and service history during an inspection to see what it's worth (and what you can borrow).

How To Get Approved For Quick Title Loans For Emergency Tax Help

As you can tell from our simple requirements above, we make the process as straightforward as possible. We understand the stress of emergency costs, so we offer same-day approval. As long as you meet our requirements, you can get approved at one of our stores within 30 minutes.

The following is the approval process for a fast title loan in NC:

• Fill out our online inquiry form with your basic information
• Answer our phone call to discuss how title loans work
• Bring your required items to our closest store location for verification
• Get your vehicle inspected for its value
• If approved, sign the loan agreement to finish the process
• Receive your fast title loan cash later the same day or by the next business day

Get Tax Bill Loans In SC With Carolina Title Loans, Inc. Today!

You can cover unexpected tax bills in many ways, including claiming hardship, requesting an extension, and using your employer's benefits. However, when these options don't suffice, you can always turn to us at Carolina Title Loans, Inc. for a fast title loan in SC. Kickstart proceedings by filling out our online title loan form before getting approved at one of our branches within half an hour.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.