It’s official: Taxes are due next week. Back in March, the government pushed the filing deadline to July 15, and the Treasury Department recently confirmed they won’t be moving it again. If you have been putting it off, now is the time to file your tax return and pay what you owe.
It’s also the deadline for your second-quarter tax payments, which moved because of the pandemic. Your state may have a different due date for quarterly tax payments, though. You can check your state’s tax agency website through the Federation of Tax Administrators.
For more on personal finance, check out the video below:
As a reminder, we have a list of websites with free filing options for both federal and state taxes. You may qualify to file your taxes for free if you made $69,000 or less in 2019.
If you need more time to file, you may use Form 4868 to request a tax-filing extension. This will give you until October 15, but you won’t be off the hook for your tax payments. The form asks for an estimate of how much you owe—along with how much you can pay now.
What happens if you can’t pay? Well, you may have more options than you expect. Most taxpayers qualify for the following options, according to the IRS.
- Online Payment Agreement - If you owe $50,000 or less, you may qualify for an online payment agreement. The options may include full payment, paying in 120 days or less, or a long-term payment plan. You can see the costs and fees here.
- Installment Agreement - Those who don’t qualify for the online payment agreement may apply for an installment agreement. You may apply by phone or by mail with Form 9465. There may also be fees for this option.
- Temporarily Delay Collection - If you can’t afford to pay, you may ask the IRS to hold off on the collections process until your financial situation improves. You will still accrue penalties and interest.
- Offer in Compromise - If you can’t pay off your tax debt, it may be possible to settle for less than what you owe. You can see if you are eligible with the Offer in Compromise Pre-Qualifier.
Regardless of which option you choose, you shouldn’t ignore next week’s tax filing deadline. Otherwise, you will also owe a failure-to-file penalty, which is 5% of your total tax due per month (capped at 25%). For comparison, the failure-to-pay penalty is much smaller, at only .5% per month.
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July 08, 2020 at 02:30AM
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What to Do if You Can't Pay Your Taxes Next Week - Lifehacker
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