Tax day is July 15, in exactly two weeks. Circumstances this year have been difficult to say the least, so a lot of people may not be ready to file or pay their taxes just yet. Read on to discover what are the alternatives available in each situation.
Request an Extension to file
People who can’t file their taxes by July 15 can request an extension that allows them to file by October 15, 2020. Don’t forget that an extension to file is not an extension to pay. This means that you still have to pay your taxes totally or partially before July 15, even if you file your taxes at a later date. There are two ways to request an extension.
- Filing form 4868, Automatic Extension of Time to File U.S. Individual Income Tax Return.
- Paying all or part of their tax due indicating that the payment is for an extension.
No matter what option you choose, don’t hesitate to seek the assistance of a tax professional if you need help completing any of the steps involved.
The Options for People who Can’t Pay Their Taxes by July 15
On the other hand, people who can’t pay their taxes by July 15 also have several options available to them. These alternatives include:
- Online payment agreement:They are available for individuals who owe $50,000 or less (including penalties and interest) or for businesses that owe $25,000 or less (including payroll tax, interest and penalties).
- Installment agreement:People who do not qualify for an online payment agreement, or decide not to use it, can take advantage of this option.
- Temporarily delaying collection:If the IRS determines that a person can’t pay, they can decide to temporarily delay the collection process. However, keep in mind that penalties and interests continue to accrue until the full amount due is paid.
- Offer in compromise:In some cases, the IRS may reach an agreement to allow a person settle their tax bill for less than the amount they owe. To know if you are eligible for an offer in compromise, use the official IRS tool Offer in Compromise Pre-Qualifier.
Keep in Mind State Taxes
It’s important to keep in mind that the July 15 deadline refers to federal taxes. The dates for state taxes may differ, so be sure to get accurate information about your specific location. Here you can find links to the websites of the tax agencies of every state.
The Experts at Meadville Tax Service Are Here to Help You
The IRS’ response to COVID-19 changes constantly, so it’s important to stay updated. You can check the IRS website or this blog. It’s also a good idea to get advice from an expert who can help you get advantage of the relief initiatives unrolled by the government.
At Meadville Tax Services we have the know-how and the drive to assist you so you can file your taxes efficiently, limiting your tax liability while staying compliant with federal tax regulations.