Filing an extension? Don’t forget IRS tax payment
“There’s still time to avoid all penalties. Pay at least 90 percent of your 2017 tax bill and file an extension by the
Filing an extension helps but doesn’t exempt procrastinators from paying
The monthly penalty for not filing a tax return is 10 times greater than the penalty for failing to pay. The best way to avoid this penalty, which could quickly add up to 25 percent to their tax bill, is to file a completed tax return or apply for an extension. However, an extension doesn’t apply to any payments due.
The extension to file is not an extension to pay for those taxpayers who owe the
The monthly penalty for not paying in full is 0.5 percent of the unpaid balance per month with a maximum of 25 percent. The monthly penalty for not filing a tax return is 5 percent and capped at a maximum of 25 percent. For example, for someone who owes
Taxpayers who cannot pay have options if they work with the
“Time and making accurate estimates aren’t the only obstacles to avoiding penalties. You also have to have the money available to make the payment. But if you don’t, a tax professional can help you understand your payment options to minimize your penalties,” said Pickering.
If a taxpayer can’t pay their balance due all at once, they may qualify for one of several tax payment alternatives. For example, they can request a short-term extension to pay, make an installment agreement or even pay with a credit card. In some instances, the taxpayer may qualify for an offer-in-compromise. By working with the
A tax professional can help taxpayers determine the best way to pay their tax bill in their unique situation, as well as estimate their tax liability so they can avoid failure-to-pay or underpayment penalties.
Source: HRB Tax Group, Inc.