Your life is in a whirlwind right now. Not only are you juggling your job and your children’s schooling, but it’s also tax season. On top of that, if you’re reading this in Spring 2020, it’s tax season during an international health crisis.
In light of the coronavirus pandemic, the Internal Revenue Service (IRS) has decided to make the deadline for filing 2019 federal tax returns July 15. However, you may still find it impossible to complete your tax filing process in time this year, and you’re worried about the consequences you’ll face as a result. What exactly are your options?
Here’s what you need to know about filing your taxes late and the late tax filing help you can take advantage of, for any tax season.
Filing an Extension
If you realize that you’ll be filing your taxes late, you need to file for a federal tax filing extension. This late tax filing help move will push back your deadline and thus protect you from potential penalties.
Penalties for filing your taxes late can add up quickly, as you’ll be charged 5% of your owed tax amount for every month that you are late. So, for instance, let’s say that you must pay $2,500 to the IRS and you are four months late. Your penalty would amount to $500. Note that if you are over 60 days late, your minimum penalty will be $100 or one-tenth of your owed taxes, whichever is lower. However, again, you won’t have to pay penalties if you file for an extension.
Your Owed Tax Amount
Note that if you’re filing your taxes late but are granted an extension, you have until October 15 to file. Still, extending your tax return filing time doesn’t mean you’ll extend the amount of time you have to pay what you owe with your tax return. If you anticipate owing the IRS, you must estimate your tax debt amount and pay this with the IRS’s Form 4868 by July 15. Doing this will cause the IRS to grant your extension automatically.
If you fail to pay all of your owed tax amount by July 15th, you will probably incur a 0.5% penalty each month until you have paid the entire owed amount. The maximum penalty for late payments is one-quarter of your due amount.
Also, if you decide to never file, the IRS could easily go back an unlimited number of years to assess tax and collect it from you. So, it’s in your best interest not to ignore the tax filing process.
What to Do If You Can’t Pay What You Owe the IRS
Let’s say that you can’t pay the IRS the money you owe in taxes. You have multiple options to help you. One option is an IRS offer in compromise. This is a settlement you work out with the federal government, where the government will likely accept less than your full amount of tax owed.
Another option is an installment plan. This type of plan will allow you to satisfy your debt via monthly payments. It is a viable option if you’re ineligible for an offer in compromise.
Take Advantage of Tax Help at Delia Law
If you think you’ll be filing your taxes late, you don’t have to navigate this process alone. Late tax filing help is available through Delia Law. We’ll advise you regarding filing for a federal tax filing extension. In addition, if you owe taxes that you can’t pay, we’ll help you to choose the best option for addressing this situation as soon as possible, whether that is an IRS installment plan or an IRS offer in compromise, for example.
Also, if you end up accruing penalties for not paying your taxes on time, or even for not filing your tax return, we can help you to seek the removal or reduction of your penalties/interest through a penalty abatement with the IRS. You can take advantage of this option if you can show that your failure to pay stemmed from a reasonable cause.
We can additionally help you to pursue IRS currently not collectible status. This means you won’t have to timely pay the taxes you owe due to hardship, however the debt will still remain, accruing interest and penalties. Achieving this status is possible if the IRS determines that you’re incapable of paying off your tax debt in full via an installment agreement.
Get in touch with us to learn more about filing your taxes late as well as the late tax filing help and the late tax payment help available.