April 15th is the deadline for most taxpayers to file federal returns and paying taxes. Experts say you need to file on time and pay what you can to reduce penalties and interest. However, if you can’t cover your full balance, the IRS has a payment plan and most taxpayers can qualify.
The tax deadline is a few days away, and the IRS urges taxpayers to submit returns on time and “pay as much as possible.”
However, if you can’t cover your total tax balance, according to the institution, you have the option of remaining tax.
For most tax returnrs, April 15 is the federal return and tax due date. However, if your state or county is affected by a natural disaster, your federal deadline may be later.
If you are in an army stationed abroad, or in a combat zone during tax season, you are eligible for certain auto-expansions related to filing and paying federal income taxes.
Additionally, people living and working abroad have time to submit.
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If you are short on tax forms or need more time, you can file a tax extension by April 15th. This will result in the federal filing deadline of October 15th.
But “This is not an extension to pay, it’s an extension to submit,” said Jo Anna Fellon, managing director of financial services firm CBIZ.
File by April 15th and “pay what you can”
Even if you can’t cover your balance by April 15th, you will still need to file a return to avoid a higher IRS penalty, experts say.
File penalty failures are 5% or partial months of outstanding taxes per month capped at 25%.
In comparison, payment disability is 0.5% of monthly taxes, limited to 25%. Interest will be charged on both penalties. This is currently 7% of individuals.
“Submit on time and pay what you can,” said Misty Erickson, tax content manager for the National Association of Tax Professionals. “We’re going to reduce penalties and interest.”
Don’t panic if you can’t cover the entire rest by April 15th, as there may be payment options, she said.
“The IRS wants to work with you,” Erickson added.
Options when you cannot pay taxes
“Most individual taxpayers can qualify for payment plans,” the IRS said in a recent news release.
The “fastest and easiest way to sign up” is to use an online payment agreement that includes setup fees, according to your agency.
These payment options are:
Short-term Payment Plan: This may be available if you are borrowing less than $100,000 including taxes, penalties and interest. You can pay in full for up to 180 days. Long-term Payment Plan: This option is available if your balance, including taxes, penalties and interest, is less than $50,000. The monthly payment timeline is usually 10 years.
The agency has recently improved its payment plans to make the program “easier and more accessible.”
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