The Internal Revenue Services announced a major changed that made their official website crashed and left millions of taxpayers feeling frustrated. The deadline to file the people’s taxes have been extended from the original April 17 date to April 18 midnight.
A lot of people weren’t able to make the new deadline so if you’re one of these people, don’t worry, a lot of people knew they couldn’t make it. Even President Donal Trump also requested an extension along with other 11.6 million people as estimated by the IRS. For sure, a lot of other people just completely ignore it without a plan.
If you purposely missed the deadline or really just forgot about it, you need to know some things to avoid paying high penalties.
Initially, the deadline for an extension was April 18 and for those who asked for one, they will have until Oct. 15 to file their taxes. This should encourage you to put your tax returns on top of your priority list, right?
You will be given an additional six months to file your tax return if you filed IRS Form 4868 on or before the April 2018 filing deadline. Now your taxes is considered super late if you didn’t file IRS Form 4868 or-or before the April 2018 filing deadline as well as didn’t file your return. Prepare to face the IRS’s assessment of interest on your outstanding tax bill. You will also need to pay penalties for failing to file and penalties for failure to pay your penalties.
It’s important for you to remember that a tax extension only gives you more time to file your return, not more time to pay. Therefore, if you miss the October deadline, you will be owing therefore Interest - which means more headache.
In addition to this, you may also owe a higher late-payment penalty. The IRS normally charge 0.5% per month of the outstanding tax not paid by the April deadline. It’s 25% for the maximum penalty. If by the April deadline you decide to pay at least 90% of your actual tax liability and pay the rest once you file your tax return, you might catch a break.
A late-filing penalty may also be charged to you by the IRS which is 5% of the amount due for every month or partial month your tax return is late. The amount due is charged with a maximum of 25% penalty.
You will need more time to do your taxes in 2019 but since you already know that, you just have to make sure that you are able to file IRS Form 4868 on or before the tax filing deadline which will be April 15 next year. Everything usually goes smoothly if you just keep the deadline in mind and you will be able to avoid unnecessary penalties by doing so.
Never forget that that getting an extension does not mean you have more time to pay taxes you owe. Instead, you are given more time to be able to file your tax return so be sure you so, on time. What you owe can be estimated and some or all of that you can send with your extension request when you file for an extension. You will likely be asked to pay interest on the difference if the estimated payment ends up being less than what you actually owe. In other words, the longer that’s outstanding, the more interest you’re going to deal with.
If you can’t pay the bill yet, don’t put off filing your tax return. You can request the IRS to get one of their offered installment plans if you can’t pay your taxes. The agency also has an “offer in compromise” wherein you pay less than you owe if you meet certain qualifications. If the collection of debt can cause you to fall into financial hardship but you were required to pay your debt in full, you can also temporarily delay the collection.
It is, however, important to note that the Offer in Compromise program isn’t for everyone. You may need to explore all other payment options and if you’re approved for a delay, to protect the government’s interest in your assets the IRS will file a federal tax lien against your property.
