As the nation and world begin to pull out of the global pandemic, many individuals are struggling to file their 2020 taxes by the tax filing deadline. Unfortunately, even though the IRS extended the filing period, this extension ended on May, 15, 2021 with an extra month for Texans. If you were unable to submit your taxes with this extra time, it is not the end of the world, though you may end up with some sizable penalties if you do not get it in soon. If you already owe quite a bit in taxes, you will continue to add interest the longer you wait to file and pay.
Here’s what you can do to minimize penalties and interest if you end up filing your taxes late:
If I Didn’t File For an Extension Do I Owe A Penalty?
If you failed to file for an extension, you will most likely owe a fee, unless you are due a refund from the IRS. The fee for late filing is usually 5% of the tax owed for each month, up to 25%. You will also owe interest that is tacked on from your late payments, at a rate of one-half percent (0.5%) per month, up to 25% of the unpaid tax balance.
This can add up quickly. If you cannot pay all of your taxes at once, there are payment options you can utilize when filing your taxes. You can pay via credit card, debit card, or have the funds directly withdrawn from your account. In fact, most IRS offices will even accept cash. If you need a grace period, there is a penalty relief of six months for taxpayers with a certain income. Working with an experienced Enrolled Agent, such as Sandra King, can help you to navigate this difficult tax situation.
Sandra King is a tax experts with decades of experience helping individuals and businesses with their tax preparation. If you are expecting a tax refund, you still have time to file your taxes for free without having to jump through extra hoops to claim your money. For those who owe taxes, the sooner you file a tax return the less penalties you will be hit with.
According to the IRS:
If you owe taxes, you can view your balance, pay with IRS Direct Pay, by debit or credit card or apply online for a payment plan, including an installment agreement. Before accessing your tax account online, you must authenticate your identity through the Secure Access process. Several other electronic payment options are available on IRS.gov/payments. They are secure and easy to use. If you pay electronically, you’ll receive immediate confirmation when you submit your payment. Also, with Direct Pay and EFTPS, you can opt in to receive email notifications about your payments.
If you need more time to pay your taxes, you can apply for an installment agreement with the IRS. The best way to apply is to use the IRS Online Payment Agreement tool. Once you complete the online process, you’ll receive immediate notification of whether your agreement is approved.
If you need help navigating your specific tax situation or are in need of making an offer in compromise, our team can help you. We have decades of experience helping our clients solve even the most complex tax situations. From communicating directly with the IRS on your behalf to helping you submit an offer in compromise, we have got your covered.
What Is An Offer In Compromise?
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. The IRS considers your unique set of facts and circumstances including:
- Ability to pay;
- Expenses; and
- Asset equity.
The IRS generally approves an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time. Explore all other payment options before submitting an offer in compromise. The Offer in Compromise program is not for everyone.
King Financial Services in Dallas
Contact us today to learn more about the tax and financial services we offer. Sandra King is an enrolled agent, empowered by The United States Treasury to prepare your personal or business tax filing. While her services are offered nationwide, Sandra King locally serves the greater Dallas-Fort Worth area, including but not limited to Arlington, Bedford, Colleyville, Euless, Fort Worth, Grand Prairie, Hurst, Mansfield, North Richland Hills, and Richland Hills.
King Financial Services Inc
610 S Industrial Blvd. Suite 140
Euless, TX 76040
Phone: (800) 503-1343
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