Can’t pay your taxes? File your return or pay more

Can’t pay your taxes? File your return or pay more




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Here’s some important facts if you owe and can’t pay:

— Filing for an extension doesn’t help. Although
you’ll have another six months to file your return, you won’t have
additional time to pay any taxes due.

— Expect a penalty if you file a return without a
payment. The Internal Revenue Service will charge 6 percent interest on
the amount you owe, plus a late payment penalty — typically 0.5 percent
per month.

— Inaction will cost much more. The late-filing
penalty is 5 percent per month, on top of the late payment charges.
That’s $50 a month for every $1,000 owed, just for failing to send in
the paperwork.

It makes far more sense financially to file your return and request a payment agreement.

If you e-file and owe less than $25,000, you can
arrange a payment agreement online at www.irs.gov . You may also arrange
a payment plan by talking with an IRS agent on the telephone, or in
writing.

“They’re extremely lenient, so long as there is a
clear effort to pay,” said Matt Becker, a tax partner with accounting
and consulting network BDO in Grand Rapids, Mich. He said it is
sometimes possible to get penalties waived as well, because the IRS will
take individual circumstances into consideration.

A payment agreement will halt collections, a process which can create more serious problems."

http://newssun.suntimes.com/business/4754018-420/cant-pay-your-taxes-file-your-return-or-pay-more.html