Mellody's Tax Tips for a Tough Year

You must still pay all the taxes you owe on April 15, or you will incur interest charges. Filing an extension should not be done in place of not filing a return at all. It's not a way to defer payment. So, if you know you can't pay your taxes, you'll need to set up a payment plan.

Try Not to Use a Credit Card to Pay Taxes

The IRS says about that 2.5 million Americans have already used their credit or debit cards to pay their tax bill this year. That's a 12 percent increase from last year. But while this may seem like a good idea, you will likely be charged a convenience fee of a 2.49 percent on your entire tax bill by one of the approved service providers handling your payment.

On average, Americans owe about $2,200 to the IRS, so with the convenience charge your total amount owed would be $2,255.

If you only paid the monthly minimum on this balance, and you had an average interest rate of 12 percent with a minimum payment requirement of 2.5 percent, it would take you almost 14 years to pay off this debt and you would end up paying an additional $1,350 in interest.

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