The deadline for filing a tax return for which you have asked for an extension is approaching on October 15, 2018. Individuals often file an extension if they have a complicated return involving multiple income sources, stocks, bonds, or are shareholders for a certain organization. While anyone is eligible to submit an extension application, few realize the added time is for filing only and not an extension of time to pay.
If you believe or are aware taxes will be owed to the Internal Revenue Service (IRS) for the previous year then this amount must accompany your request for an extension. If not, it is likely the penalties and interest accrued between the filing time and once the actual payment is applied will begin and be added onto the initial amount. If you find yourself in this situation or simply cannot owe the due amount at any point - when first filed or prior to the extension deadline, then one of these different options for a deferred payment may be appropriate.
Short-term Extension to Pay
One extension and payment option
involves receiving an additional 120-days in order to pay due taxes. This request can now be made online by filling out a Payment Agreement Application to see if you qualify for a delayed payment.
Using this method, individuals will often continue to accrue any appropriate penalties and interest associated with the delay but it puts everyone on the same page in understanding the situation is not being ignored and will be properly addressed.
In some cases, the IRS will waive penalties for certain individuals who have suffered an unforeseen hardship or other qualifying reason causing the delayed payment. This requires a separate form to be submitted.
The IRS will accept payments submitted on a regular schedule for amounts owed less than $50,000. While there is a one-time fee ($105) to have an installment plan created, it provides a repayment schedule and allows individuals an opportunity to track their tax payment as it is applied.
One big advantage of theIRS installment agreement
is that a person can extend the payment of their amount due over the course of 72-months instead of immediately or with just the 120 day extension.
Offer in Compromise
A last resort for people in serious tax debt, the offer in compromise is an agreement reached between the IRS and party in question to settle an amount owed for less than originally due. This step also requires a filing fee ($186) and may be rejected for numerous reasons.
Rarely will this be a step to which the IRS is in agreement but there are rare instances where this method would apply.
The accounting and tax experts at Bloch, Rothman, and Associates
are ready to assist you with any filing requirements or discuss an individual situation where money may be due but cannot be afforded at this time. Our highly trained associates can help ensure that you not only receive the best service possible but also pay only the appropriate and required amounts for your individual or business income taxes. Known for providing expert advice and financial assistance, the professional staff at Bloch, Rothman, and Associates can also help with a variety of other accounting, bookkeeping and payroll options on an individual or business level. Whether you need an explanation for a random tax form, are potentially in need of appropriate representation in tax court, or could use help in any other tax area our staff is ready and willing to assist. Call 303-321-7160 or contact us
for your initial free no obligation consultation.