October 15th Tax Filing Deadline Approaches
Taxpayers who have filed an extension request should file their returns by October 15 tax filing deadline to avoid the late filing penalty, which is generally 5 percent per month of any unpaid tax. Tax Samaritan urges those who still owe taxes and must file to examine several available options. Taking advantage of the IRS tax extension allows more time to file, but not to pay any taxes due, so interest is accruing on taxes not paid by the April filing deadline (or June 15 deadline for overseas taxpayers). It’s always better to file your return and pay what you can, and show the IRS your intention to pay the rest of your tax liability by making payment arrangements. Taxpayers can e-file their returns until the October 15th tax filing deadline.
There a number of options available to taxpayers to pay their tax liability prior to the October 15th tax filing deadline. Taxpayers that can pay their tax liability in full can do so by debit or credit card, electronic funds transfer or check or money order. Or taxpayers can ask the IRS for permission to make monthly installment payments by completing Form 9465, Installment Agreement Request, and attach it to the tax return. The IRS will approve or deny the request by sending out a written response. If the request is approved, the IRS will charge a fee that will be deducted from the first installment payment and will send instructions on how to make the monthly installment payments. Another available option to ensure timely payments is to have the funds directly debited from a bank account.
Some financially distressed taxpayers may quality for an Offer in Compromise. Under the OIC agreement, the IRS may agree to settle the taxpayer’s liability for less than the full amount of taxes owed. The IRS is not likely to approve an OIC if there’s evidence that the taxpayer could pay the full amount through the installment plan or another method. The IRS measures the “reasonable collection potential” (RCP) for payback by considering the value of the taxpayer’s assets including property, cars, other accounts and anticipated future income. A taxpayer can request consideration for an OIC by filling out Form 656, Offer in Compromise, or Form 656L, Offer in Compromise (Doubt as to Liability) and submit it with their tax forms.
For more information and assistance on filing your return before the October 15th tax filing deadline, please visit Tax Samaritan.