The April 17th tax deadline is looming closer and you know that you’ve got to get your payment in soon. But, what if you don’t have the cash on hand? Don’t panic, there are ways to file your taxes and avoid penalties – even if you can’t pay everything that you owe right away.
- Pay with plastic. The IRS accepts credit and debit card payments. The IRS does not charge a fee for credit or debit payments, but you should be aware that your debit card service provider may charge you a fee (usually between $3.89 and $3.95). Credit cards have a minimum fee of approximately $4 and charge anywhere from 1.89% to 2.35% of the tax due. To learn more about paying your taxes electronically, visit www.irs.gov/e-pay. One caution when paying with plastic: if your credit card has a high interest rate and you make only minimum payments, you may end up paying way more in interest than it would have cost you to pay your taxes in full up front.
- Pay later. Based on your circumstances, you may qualify for a short extension. There is no fee (and usually minimal penalties and interest) on 60 to 120 day extensions, not to be confused with the automatic 6 month extension to file your return. They can be requested through an Online Payment Application at www.IRS.gov. Need more than 120 days? If you fall within certain income limits and meet other conditions, you may be eligible for a six-month extension to pay. But, you need to file for an extension to pay by April 17. Your 2011 taxes (plus any penalties and interest) will be due by October 15, 2012. To file for this exemption, submit form 1127-A, Application for Extension of Time for Payment of Income Tax for 2011 Due to Undue Hardship.
- Pay in installments. If you owe less than $50,000, you can apply for an installment agreement. Setting up an installment plan may help you to avoid a potential tax lien. You can apply for installment payments using the Online Payment Agreement at www.IRS.gov or by filing Form 9465, Installment Agreement Request.
No matter how you decide to pay, the important thing is that you decide quickly. April 17th is the filing deadline for 2011 taxes, and also the deadline for requesting extensions on the payments of those taxes.
Contact our Ohio Tax specialists
Have you been putting off filing because you can’t pay your tax bill? Worried about fines and penalties piling up? Want to apply to pay later or pay in installments, but don’t know how to file the proper forms? Contact Rea & Associates (today!) for assistance. Our Ohio tax specialists will help you get the proper paperwork filed now so that you can avoid interest and penalties in the future.