When You Come Late to the Taxman’s Door

By: TSPadmin

April 15 has come and went but you have yet to file a complete return or you don’t have the resources to pay your tax bill. You neither have to evade the Internal Revenue Service (IRS) nor hide under the proverbial rock since you can take the following steps before the deadline. You may be unable to escape your tax bill but, at least, you can skip on the serious consequences of your failure to file your complete and accurate returns.

Request for an Extension to File

If you cannot file your tax return on or before April 15, you can file for an extension – and you are not alone in this respect since approximately 6 million taxpayers file for it every year. You can choose from one of two extensions, namely: (Both returns must be filed on or before April 15 of the tax year)

  • Form 4868, which allows for filing until August 15 without incurring penalties for late filing
  • Form 2688, the Application for Additional Extension of Time to File U.S. Individual Income Tax Return, which you must file by August 15. You will have until October 15 to file your return but you must state on the application a valid reason, such as your tax preparer being ill, on your request.

But there’s catch to filing the request for extension. You cannot extend the time for paying your taxes since the IRS will still ask for payment of your estimated taxes along with your extension request. You will be required to pay at least 90% of your tax bill by April 15 –otherwise, you have to pay the interest of up to 1 percent per month and penalties on the underpaid amount upon filing of your tax return.

You must file your request for extension by April 15 since the IRS has stiff penalties for it, too. You will not only be charged interest for the tax owed but you will also be charged with a penalty of 5 percent per month of your taxes due, for up to a whopping 25 percent.

Pay What You Can

You may be unable to pay all of your tax bill. Your best course of action is to file a return and enclose payment in an amount that you can afford. You are still performing part of your obligation, not to mention that you will be escaping the worst of the sanctions made by the IRS. This is because the penalty for failure to file is higher than the penalty for failure to pay after filing.

Ultimately, you must be a law-abiding citizen so that you can do your part in keeping America the great country it is, regardless of your opinions about its tax laws.  

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