What to do if you missed your tax payment deadline: some tips
Some Americans this year may have missed the July 15 tax deadline. Therefore, the IRS can begin to charge penalties and interest on late payments unless prudent action is taken to resolve the situation. Writes about it Fox Business.
“A common reason people miss the tax deadline is because they think they owe it and they don’t want to deal with it,” said Christina Taylor, chief tax officer at Credit Karma.
Delaying payment, however, will only make the problem worse.
Here are some steps you can take to minimize your fines if you are unable to pay taxes before July 15th.
Submit your return as soon as possible
Even if you missed the tax deadline, the sooner you file your return, the better.
This is because fines and interest will start to accumulate immediately.
If you file and pay taxes later than the specified deadline, you will end up having to pay an impressive amount. First, you will be charged with a fine for late filing of the declaration - this is 5% of the amount of unpaid taxes every month, up to a maximum of 25%. And the penalty for late payment of taxes is 0,5% of the amount that you owe monthly, but not more than 25%. If both fines need to be paid, it will significantly hit your wallet. But if you exclude the fine for late filing of the declaration, then the amount of the fine is reduced to 0,5%.
Pay what you can
Even if you are unable to pay the entire tax bill, Taylor advises private individuals to pay what they can now, as a means of limiting accrued interest.
For example, a person who owes $ 1000 but paid $ 200 will receive a fine of $ 800 instead of the full $ 1000, said Taylor.
Keep in touch with the IRS
The IRS expects fewer people to pay taxes fully this year due to the financial consequences of a coronavirus outbreak, but you still need to tell the agency that you cannot pay your bill, Taylor recommends.
The agency is willing to develop repayment agreements, but being diligent about your situation will help you achieve the best results.
Ask for help
If you are unsure what to do or how to cope with your financial situation, consult or seek help from a qualified professional.
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