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Attention Taxpayers – File Taxes By October 15th Or Pay The Price!

Attention Taxpayers – File Taxes by October 15th or Pay the Price!

Dear American procrastinators, the Internal Revenue Service kindly reminds you that the Oct. 15 deadline is approaching fast and remains in effect for people who requested a six-month extension to file their 2017 tax return.

Federal tax returns are due each year on April 15th. However, if you filed for an automatic extension on filing your return, you can file anytime between now and October 15th.

Keep in mind that this does not mean that those with an extension did not have to pay taxes on time. If you owed money on your federal taxes you were required to pay it by April 15th, regardless of whether you received an extension.

The deadline only allows you to file your taxes in October (sending in paperwork, vs. sending in the money). Taxpayers with extensions should file their returns by Oct. 15, even if they can’t pay the full amount due. Otherwise, the IRS may charge you with substantial interest and penalties for late filing.

If you are due to receive a refund you don’t have anything to worry about. The government doesn’t mind you lending “Uncle Sam” money.

Payment/Filing Options

The Internal Revenue Service urges taxpayers to choose the speed and convenience of electronic filing. Taxpayers can file their tax returns electronically or on paper. Payments accompanying paper and e-filed tax returns will be accepted and processed as the IRS receives them.

Filing and making payments is easy:

  • Direct bank transfer
  • Mail a check or money order
  • Credit or debit card

E-file Now: It’s Fast, Easy and Often Free

IRS e-file is fast, accurate and secure, making it an ideal option for those rushing to meet the Oct. 15 deadline. There are benefits to filing your tax returns electronically as well.

The tax agency verifies receipt of an e-filed return, and people who file electronically make fewer mistakes too. Most people prefer this method because it greatly expedites the refunds back to the taxpayer that is awaiting a return. Semaphore can also help taxpayers e-file their tax return.

If You Don’t Have the Funds to Pay Your Taxes

Don’t panic because there’s still hope for you. If you don’t have the money, you absolutely should still file to avoid any penalties. It is important to remember your options as well.

  • Short-Term Extension of Time to Pay: If you will be able to pay your tax balance due within 120 days, call the IRS to see if you can qualify for a short-term extension of time to pay.
  • Installment Plan: If you owe more than $50,000 you may qualify for an IRS installment agreement. Note that there is a $105 application fee and other charges may apply.
  • Offer-in-Compromise: Be aware that this is not an option for most taxpayers and is meant to be a last resort.

Talk to a Semaphore tax professional to see if your case applies to any of these options.

Why You Should File Even If You Can’t Afford to Pay

File on time and pay as much as you can. That way you will avoid the late filing penalty, which is higher than the penalty for not paying all the taxes you owe on time. Apply for a payment plan using the online payment agreement tool on IRS.gov.

You can also file form 9465, Installment Agreement Request, with your tax return. If you are unable to make payments because of a financial hardship, Semaphore can help you choose the best option depending on your circumstance.

Late Filing and Late Payment Penalties

When you do not send the IRS your tax obligation by the tax deadline, late filing penalties are high. The IRS will assess a late filing penalty of 5% of the unpaid taxes not paid by the due date for each month your taxes are late, usually to a maximum of 25%.

It is very easy for late filing penalties to reach several hundred or several thousand dollars. If your payment is more than 60 days past due, the minimum late filing penalty is $100 or the balance of the taxes you owe, whichever is less.

Translation- pay your taxes ASAP to avoid large penalties and fees!

Overlooked Tax Benefits

Before filing, the Internal Revenue Service encourages taxpayers to take a moment to see if they qualify for often-overlooked credits and deductions.

  • Benefits for low-and moderate-income workers and families, especially the Earned Income Tax Credit. The special EITC Assistant can help taxpayers see if they’re eligible.
  • Savers credit, claimed on Form 8880, for low-and-moderate-income workers who contributed to a retirement plan, such as IRA or 401(k).
  • American Opportunity Tax Credit, claimed on Form 8863, and other education tax benefits for parents and college students.

The Good News- The IRS Will Work with You

The good news to remember is, the IRS will work with you if you owe money through payment plans and programs for people in financial hardship situations.

A Semaphore tax professional can help you determine which option is best for you and even request the payment plan for you from the IRS. If you need more help understanding your taxes, please get in contact with one of our experienced tax professionals. We look forward to your call!

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