Maybe You Should Not File Your Income Tax Return on April 15th If You Owe Income Tax!
If you owe the IRS for the year 2008 and have not filed your return you may be wondering what should you do.
Should I file the return, file an extension or do nothing? What happens if I file my return on April 15th and I owe? If you file the return and do not have the money, the IRS will process your tax return and then send you a bill in about 30 to 60 days.
If you have the money when the bill comes you could pay the bill.
Most people owe more than they can pay in 30 to 60 days.
If you do not have the money you could ask the IRS for an installment agreement.
You request an installment agreement by sending in an IRS form 9465.
Many people ask me if they get an installment agreement set up with the IRS will that stop the penalty and interest.
The simple answer is no! Just like a car loan or a mortgage on a home, interest is added each month.
The IRS also adds on a penalty each month for not paying the tax by April 15th.
In another article I will discuss getting an installment agreement and the penalty and interest that the IRS adds to your unpaid balance.
Should I get an extension? Many clients told me they did not get an extension because they heard you could not get an extension if you owed the tax and did not send in the money with the extension.
It is true the extension is only an extension of time to file and not an extension to pay.
However, if you do not file for an extension and file the return after April 15th you will also be hit with a late filing penalty.
The late filing penalty is 5% a month or any part of a month (even one day late).
The late filing penalty can get as high as 25%, if you file your return more than 5 months after April 15th.
If you do not plan on filing your return by April 15th, do yourself a favor and file an application for an automatic extension of time to file your 2008 income tax return.
You request the extension by filing an IRS form 4868.
The request must be postmarked by April 15th.
If you have not filed your 2008 income tax return and are expecting a refund you have no worries.
The penalties and interest are a percentage of the tax you owe, so if you have a refund no penalty or interest is due.
Even if you think you have a refund I would still request an extension in the event you are wrong.
Today's tax returns are more complicated than ever and until you actually get the return prepared you cannot be sure you have a refund.
Should I file the return, file an extension or do nothing? What happens if I file my return on April 15th and I owe? If you file the return and do not have the money, the IRS will process your tax return and then send you a bill in about 30 to 60 days.
If you have the money when the bill comes you could pay the bill.
Most people owe more than they can pay in 30 to 60 days.
If you do not have the money you could ask the IRS for an installment agreement.
You request an installment agreement by sending in an IRS form 9465.
Many people ask me if they get an installment agreement set up with the IRS will that stop the penalty and interest.
The simple answer is no! Just like a car loan or a mortgage on a home, interest is added each month.
The IRS also adds on a penalty each month for not paying the tax by April 15th.
In another article I will discuss getting an installment agreement and the penalty and interest that the IRS adds to your unpaid balance.
Should I get an extension? Many clients told me they did not get an extension because they heard you could not get an extension if you owed the tax and did not send in the money with the extension.
It is true the extension is only an extension of time to file and not an extension to pay.
However, if you do not file for an extension and file the return after April 15th you will also be hit with a late filing penalty.
The late filing penalty is 5% a month or any part of a month (even one day late).
The late filing penalty can get as high as 25%, if you file your return more than 5 months after April 15th.
If you do not plan on filing your return by April 15th, do yourself a favor and file an application for an automatic extension of time to file your 2008 income tax return.
You request the extension by filing an IRS form 4868.
The request must be postmarked by April 15th.
If you have not filed your 2008 income tax return and are expecting a refund you have no worries.
The penalties and interest are a percentage of the tax you owe, so if you have a refund no penalty or interest is due.
Even if you think you have a refund I would still request an extension in the event you are wrong.
Today's tax returns are more complicated than ever and until you actually get the return prepared you cannot be sure you have a refund.
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