Avoid Late Filing Penalty
File on Time Even if You Can’t Pay
Do you owe more tax than you can afford to pay when you file? If so, don’t fail to take action. Make sure to file on time. That way you won’t have a penalty for filing late. Here is what to do if you can’t pay all your taxes by the due date.
- File on time and pay as much as you can. You should file on time to avoid a late filing penalty. Pay as much as you can with your tax return or extension. The more you can pay on time, the less interest and late payment penalty charges you will owe. File an extension even if you cannot pay all of your tax. This will do two things, avoid the late filing penalty and give you six months without receiving notices from the IRS. You will, however, owe interest and late payment penalty, but the penalty is essentially 90% less for the next six months with a timely filed extension.
- Your State income tax may be a bigger problem than your Federal tax owed. State penalties can be much greater than Federal penalties. Be sure to discuss with us what your payment options are.
- Pay online with IRS Direct Pay. IRS Direct Pay is the latest electronic payment option available from the IRS. It allows you to schedule payments online from your checking or savings account with no additional fee and with an immediate payment confirmation. It’s, secure, easy, and much quicker than mailing in a check or money order. To make a payment or to find out about your other options to pay, visit IRS.gov/payments.
- Pay the rest of your tax as soon as you can.
- Use the Online Payment Agreement tool. You don’t need to wait for the IRS to send you a bill to ask for an installment agreement. The best way is to use the Online Payment Agreement tool on IRS.gov. You can even set up a direct debit installment agreement. When you pay with a direct debit plan, you won’t have to write a check and mail it on time each month. And you won’t miss any payments that could mean more penalties. If you can’t use the IRS.gov tool, you can file Form 9465, Installment Agreement Request instead. You can view, download and print the form on IRS.gov/forms anytime. You may need some help with this option, we can help you set up an installment agreement.
- Don’t ignore a tax bill. If you get a bill, don’t ignore it. The IRS may take collection action if you ignore the bill. Contact us right away to discuss your options. If you face financial hardship, we can get the IRS to work with you.
In short, remember to file on time. Pay as much as you can by the tax deadline. Pay the rest as soon as you can. Call us for help with IRS problems 586-751-6060!