As the tax-filing deadline rapidly approaches, you may be considering filing an extension. The IRS allows one extension of up to six months. If you do not file your taxes within that six months, the extension is void and you receive penalties as if you never filed the extension.
Extensions extend the amount of time you have to file, but they do not extend the amount of time you have to pay fees you might owe. If you need more time to file your taxes and you think you will owe, you must pay what you think you will owe with the extension. There is a penalty and interest for not paying by April 15th. You’ll want to take the information you have, estimate the missing information, and then mail a check with the extension.
What if you don’t have the money to pay your tax bill? The IRS has an installment program. For a onetime enrollment fee of $120 ($52 if you set op direct deposit), you can break up your tax bill into payments spread out over 72 months, with a relatively modest interest rate of 3% annually. You can pay it off early. You can also pay with a credit card but the interest rates on a credit card are usually higher.
If you have your information ready then it is best to file on time. For more information or questions about your specific circumstances, feel free to contact Soulence Tax and Accounting.