If you received a tax extension in April, the deadline is October 15th, which is just over two weeks away. Tom O'Saben, director of tax content for the National Association of Tax Professionals, has joined Wealth. Break down how you can take action.
Oseven points out that it is important to pay taxes on time to avoid penalties (up to 5% per month). Additionally, if you don't pay the penalty, you could end up paying as much as 25% of your tax bill. He cautioned that the statute of limitations for the IRS to audit returns is unlimited for unfiled returns, compared to the usual three years.
Oseven says if you don't have the ability to pay your taxes in full, you can work with the IRS to come up with a payment plan. “The IRS doesn't want to pull up to your house in a black sedan and turn you away because you haven't paid your taxes. They want to work with you,” he explains. The IRS offers both short-term and long-term payment plans.
These plans typically charge about 8% interest, but Oseven says they're “much cheaper than putting your tax debt on a credit card or taking out a short-term personal loan.”
He added that having a payment plan in place can help you plan for next year's taxes, adding: “If you can somehow improve your situation now and get it back on track, you'll be better off in the future.” We may be able to send some more, so we can be a little bit behind the curve.” And at the same time proactive. ”
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This post was written by Melanie Leal
