The end of tax filing extensions is quickly drawing near. What do you do in the event you can't pay the amounts you owe? You should still file your return by the deadline and pay as much as you can. There are, however, additional steps that might help.
Credit Cards
You can charge your taxes on your American Express, MasterCard, Visa or Discover cards. In the event you go in this direction, you are able to use either of the following two sources:
Official Payments Corporation 1-800-2PAY-TAX (1-800-272-9829) www.officialpayments.com
Link2Gov Corporation 1-888-PAY-1040 (1-888-729-1040) www.pay1040.com
If a credit card is out of the question, you may be able to pay any outstanding balance over time in monthly payments through an installment agreement. If you are totally wiped out and the future looks grim, you may also want to consider getting the tax amount reduced through the Offer in Compromise program.
To apply for an installment payment strategy, fill out and attach Form 9465 to the front of your tax return. The IRS has streamlined the approval process if your total taxes (not counting interest, penalties or other additions) don't go beyond $25,000 and may be paid off in 5 years or less. Be sure to show the amount of your proposed monthly payment and the date you wish to make your payment each month. Make absolutely certain you can make the payments.
The IRS charges a $43 fee for setting up an installment agreement. You will also be charged interest plus a late payment penalty on the unpaid taxes. The late payment penalty is usually one-half of one % each month or part of a month of one's unpaid tax. The penalty rate is reduced to one-quarter of one percent for any month an Installment Agreement is in effect if you filed your return by the due date (such as extensions). The maximum failure to pay penalty is 25 percent of the tax paid late.
If you don't file your return by the due date (such as extensions), you may need to pay a penalty for filing late. The penalty for failing to file and pay timely is usually 5 % of the unpaid tax for every month or part of a month that your return is past due. The maximum penalty for failure to file and pay on time is 25 % of your unpaid tax.
In Closing
The IRS wants you in the system, even if you are broke. Whatever you do, file your tax return in a timely manner. Once filed, the IRS will work with you on payment issues. Do not get stressed. Keep in mind that numerous Americans have the same problem.
Credit Cards
You can charge your taxes on your American Express, MasterCard, Visa or Discover cards. In the event you go in this direction, you are able to use either of the following two sources:
Official Payments Corporation 1-800-2PAY-TAX (1-800-272-9829) www.officialpayments.com
Link2Gov Corporation 1-888-PAY-1040 (1-888-729-1040) www.pay1040.com
If a credit card is out of the question, you may be able to pay any outstanding balance over time in monthly payments through an installment agreement. If you are totally wiped out and the future looks grim, you may also want to consider getting the tax amount reduced through the Offer in Compromise program.
To apply for an installment payment strategy, fill out and attach Form 9465 to the front of your tax return. The IRS has streamlined the approval process if your total taxes (not counting interest, penalties or other additions) don't go beyond $25,000 and may be paid off in 5 years or less. Be sure to show the amount of your proposed monthly payment and the date you wish to make your payment each month. Make absolutely certain you can make the payments.
The IRS charges a $43 fee for setting up an installment agreement. You will also be charged interest plus a late payment penalty on the unpaid taxes. The late payment penalty is usually one-half of one % each month or part of a month of one's unpaid tax. The penalty rate is reduced to one-quarter of one percent for any month an Installment Agreement is in effect if you filed your return by the due date (such as extensions). The maximum failure to pay penalty is 25 percent of the tax paid late.
If you don't file your return by the due date (such as extensions), you may need to pay a penalty for filing late. The penalty for failing to file and pay timely is usually 5 % of the unpaid tax for every month or part of a month that your return is past due. The maximum penalty for failure to file and pay on time is 25 % of your unpaid tax.
In Closing
The IRS wants you in the system, even if you are broke. Whatever you do, file your tax return in a timely manner. Once filed, the IRS will work with you on payment issues. Do not get stressed. Keep in mind that numerous Americans have the same problem.
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