Tax season is always a stressful time for many Americans, and this year was no exception. With the constantly changing tax laws, it’s easy to forget or miss important tax deadlines. If you missed the tax return extension deadline, the best recommendation is to file your tax return and pay your tax liability owed as soon as possible.
First, let’s understand what the tax extension deadline is. If you need more time to file your tax return, you can request a tax extension by filing Form 4868. This form gives you an additional six months to file your tax return, moving the deadline from April 18th (for 2023) to October 15th, 2023. However, an extension does not give you more time to pay any taxes you owe. You must still estimate and pay your tax liability by the original due date of April 15th to avoid any penalties and interest charges.
If you missed the extension deadline, the first step is to file your tax return as soon as possible. Even if you cannot pay the full amount owed, filing your return will help you avoid any additional penalties and interest charges. The longer you wait to file, the more you will owe in interest and penalties.
Next, calculate your tax liability owed. If you cannot pay the full amount owed, consider setting up an installment plan with the IRS. An installment plan will allow you to make monthly payments until your tax debt is paid in full. However, keep in mind that interest and penalties will continue to accrue until the debt is paid in full.
It’s important to note that the failure to file penalty is much more severe than the failure to pay penalty. The failure to file penalty is 5% per month of the amount owed, up to a maximum of 25%. The failure to pay penalty is only 0.5% per month of the amount owed. Therefore, it’s crucial to file your tax return even if you cannot pay the full amount owed.
Finally, if you’re struggling to pay your tax debt, seek the help of a tax professional. Depending on your situation, a tax professional can help you negotiate a settlement with the IRS or guide you through the installment plan process. They can also help you determine if you qualify for any tax relief programs.
In conclusion, if you missed the tax return extension deadline, don’t panic. File your tax return as soon as possible, pay your tax liability owed, and consider setting up an installment plan with the IRS. Remember, the longer you wait to file, the more you will owe in interest and penalties. Seek the help of a tax professional if need assistance in preparing, filing, paying tax owed, or if you want to better understand your current standing with the IRS and evaluate whether you qualify for any tax liability relief.
Disclaimer: The information provided above is not meant to
be legal or tax advise. You should consult your CPA and attorney to
determine the best course of action for your situation.
Mitzi E. Sullivan, CPA is a cloud based professional services provider
specializing in cloud accounting.