If you are not been able to put together all of your annual filings by Tax Day (April 18, 2022), or you can’t pay the money that the IRS is demanding, you’re not alone. Millions of Americans and small businesses miss Tax Day every year, filing taxes late, and millions more struggle with high tax bills on income if they can’t get tax deadline extensions or work something out. 

Knowing some of the rules around IRS tax extensions and other options can help quite a lot.

You may be relieved to know how easy it can be to start requesting a tax extension and what options you have to get back on track with the IRS.

Consequences of Not Filing a Tax Extension

First of all, you’ll want to know the consequences of late filing and late paying.

If you don’t file, penalties and interest will be assessed later when you finish filing. If you can’t pay what you owe, a charge of 5% interest per month penalty will apply.

That said, it’s in the taxpayer’s interest to go ahead and file and then work out a payment plan for any unpaid amounts. That’s because non-filers can rack up other charges, too, on top of the interest. That’s part of the taxpayer’s incentive not to start filing taxes late! Don’t forget that a good amount of your income is non-taxable due to a standard or itemized deduction and other concessions that a tax preparer can help you to use.

Schedule Payment Plans

The IRS will also allow you to set up a payment plan for unpaid tax amounts. You can pay a large tax bill over time after filing taxes late by cutting it up into more manageable pieces. The key is to contact the IRS as soon as possible and give them as much information as you can about your annual income.

Use Tax Deadline Extensions: Avoiding Late Filing and Payment Problems

An even better choice is to simply file an extension for your taxes.

Using a particular IRS form, you can request this tax extension and use that time to put together the information that the federal agency needs to assess your taxable income.

You should understand what forms to use in requesting a tax extension and how to communicate with the IRS. Phone communication can be intimidating, and it can also be time-intensive. You may not get access to live human help in the way you would expect. You might have to call many times and be on hold for quite some time as well.

Professional tax preparation companies and CPAs can help you. These offices are set up expressly to communicate with the IRS in the most efficient way. For example, these offices can now quickly e-file for an extension online. They can also e-file your actual return, which can be more convenient than sending one on paper to the U.S. tax agency.

If you have questions about how to file for an extension with the IRS,  talk to the CPA Nerds about the best way to move forward and tackle your tax responsibilities.