Monday, April 18, 2022, was the deadline for most taxpayers to submit their 2021 tax returns, but it’s not too late if you haven’t done so yet. Here is what must be done:
Gather all income and deduction information for tax years for which a return must be filed before calling the office to schedule an in-person or virtual appointment.
If you are due a refund, the sooner you submit it, the sooner you will get it. If you owe taxes, submit and pay as quickly as possible to avoid incurring interest and penalties.
If you owe money to the IRS but cannot pay it in full, pay as much as possible with your tax return to reduce penalties and interest. The IRS will assist people experiencing financial difficulties. If you continue to disregard your tax liability, the IRS may initiate collection procedures.
Some taxpayers may be granted more time to complete tax returns and pay any outstanding taxes. These include U.S. citizens and resident aliens who dwell and work outside the United States and Puerto Rico.
How To Submit a Payment
You may pay your taxes with a credit card, an electronic funds transfer, a cheque, a money order, a cashier’s check, or cash. When paying federal taxes using a major credit card or debit card, the IRS does not assess a fee; however, processing businesses may assess a convenience fee or flat cost. It is essential to consider all available possibilities. The interest rates on a loan or credit card may be less than the sum of the penalties and interest rates imposed under the Internal Revenue Code.
What to Do if You Can’t Make a Full Payment
If a taxpayer cannot pay their tax obligation in full, they are urged to pay as much as feasible. If you pay as much as you can now, you will owe less in interest and penalties than if you pay nothing. A taxpayer may qualify for a payment extension, an installment arrangement, a temporary delay, or an offer in compromise based on their unique circumstances. If you have concerns about any of these alternatives, please contact.
Straight Pay. Individuals may use IRS Direct Pay to make direct payments from their checking or savings accounts. If a taxpayer needs more time to pay, he or she may set up a short-term payment extension or a monthly payment plan.
Payment Plans. The majority of individuals may set up a monthly payment plan or installment agreement that provides them with more time to pay. On the unpaid part of the debt, penalties and interest will continue to accrue for the term of the installment agreement/payment plan. Before getting into an installment contract, you should pay as much as feasible.
Generally, taxpayers with a history of timely filing and payment are eligible for a penalty reduction. In general, a taxpayer is eligible if they have filed and paid their taxes on time for the preceding three years and fulfill all other conditions.
The payment choices accessible to you will be determined by your unique tax position. Full payment, a short-term payment plan (paying in 120 days or less), or a long-term payment plan (installment agreement) are all acceptable methods of payment (paying in more than 120 days). Depending on the sort of payment plan for which you are authorized, you may incur user fees. A solo entrepreneur or independent contractor must apply as an individual for a payment plan.
You may be eligible to apply online if:
Long-term payment plan (installment agreement): You filed all necessary tax returns and owe $50,000 or less in tax, penalties, and interest.
You owe less than $100,000 in tax, penalties, and interest, so you qualify for a short-term payment plan.
Cash Settlements. In 44 states, individual taxpayers without a bank account or credit card may pay their tax bill with cash at PayNearMe payment outlets (such as 7-Eleven). Individuals who desire to use this payment option must visit the IRS.gov payments page, pick the cash option under “Other ways to pay,” and then follow the on-screen instructions.
What Happens if You Fail to File an Overdue Tax Return?
It is essential to understand the repercussions of failing to file an overdue tax return and the procedures the IRS will take. Taxpayers who continue to fail to submit a necessary return and do not answer IRS demands for a return may be subject to a variety of enforcement measures, including the imposition of hefty fines and costs. For instance, the failure-to-file penalty is equal to 5% of the tax payable for each month or a fraction of a month that a tax return is late. However, this penalty is lowered for each month in which the late payment penalty is also assessed. In general, the failure-to-pay penalty rate is 0.5% of the outstanding tax for each month or fraction of a month.
Need Assistance with Your 2021 Tax Return?
If you have not yet submitted your tax return, do so immediately. Call the office as soon as possible to make an appointment.