What to Do With Your Taxes In Case You Can’t Pay Them?
The extension on filing your taxes is almost coming to an end. Is there anything you can do in case you can’t pay your taxes? It is important for you to pay whatever you can and do your return filing by the scheduled date. We discuss some additional steps here which might be helpful for you.
The taxes can be charged on your MasterCard, American Express card, Discover card, or Visa card. Going in this direction, you can use one out of two sources mentioned below:
Official Payments Corporation
Pay tax by calling 1-800-2PAY-TAX (toll free: 1-800-272-9829)
Visit the web site: www.officialpayments.com
Pay tax by calling 1-888-PAY-1040 (toll free: 1-888-729-1040)
Visit the web site: www.pay1040.com
In case you can’t pay using your credit card, then you can make an installment agreement, in which you can pay the balance in the form of monthly installments. There is also the option of reducing your tax amount by participating in a compromise program offered.
Form 9465 needs to be filled and attached with your return filing if you want the installment option of paying your taxes. For total taxes not exceeding $ 25,000 excluding interest and penalties and which can be paid within 5 years, the process of approval has been streamlined by the IRS. The proposed amount of monthly installment and the payment date should be specified correctly beforehand. You also must guarantee that the payments will be made.
For an installment agreement, a fee of $ 43 is charged by the IRS. On unpaid taxes, there will be an interest as well as a late payment charge. Normally 0.5 percent per month on unpaid tax is charged as late payment penalty but it is not fixed. This rate may be reduced to 0.25 percent for any month while your installment agreement is applicable and you file your returns on time taking your extensions into consideration. You may need to pay up to a maximum of 25 percent of penalty for late payment.
If you fail to file your returns by the due date after taking an extension, will result in a late payment charge being levied upon you. This charge is normally around 5 percent of the total unpaid tax per month. You may have to pay a maximum of 25 percent of penalty charges in case of failure to file your returns or pay taxes on time.
Even if you lack funds, the IRS expects you to adhere to the rules. You should file your returns on time by any means. If you’ve filed, the IRS will take care of the payment issues. You don’t worry. Remember that the majority of Americans face the same problem.