If the April 15th tax deadline is looming and you know you won’t be able to pay your taxes in time, it’s okay. Rocky financial situations, sudden family emergencies, and even the government shutdown can make it hard to get your taxes in order. There are lots of options you and a tax accountant can take to make everything work out. Here are three things to keep in mind:
Tax filing and tax payment are two separate obligations.
Usually, income taxes are represented as one holistic chore: you file your taxes, and submitting the payment is the last step in the process. But the IRS doesn’t see it that way. You can file your tax paperwork by April 15th without submitting a payment. Numerous contractors also do the reverse throughout the year. They pay quarterly estimates and file later.
Think about the penalties separately.
The penalties for being late on either portion are different, too. Failure to file results in a five percent monthly penalty. Failure to pay tops out at a penalty of half a percent. If you’re late on both, there’s a five percent cap per month.
This means filing should be your main obligation. A tax accountant can help you get all the paperwork in order, even if you can’t pay the total due immediately. If you don’t want to rush through taxes and risk making a mistake, it’s better to do your best and file on time. You or your accountant can amend it or submit a correction later.
Ask about payment plan options.
The IRS has plenty of tracks so you can pay your taxes over time. Figuring out a plan is better than handling the penalty. You can file for an extension, choose an installment-based payment plan, or file for penalty relief is you have reasonable cause.
Figuring out your individual taxes can be tricky even when the clock isn’t ticking down. Schedule an appointment with our accounting professionals to get started.