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Updated for Tax Year 2022 • October 18, 2022 09:51 AM OVERVIEW What do you do if you can't meet the IRS filing deadline? Learn more about filing a tax extension, late payment and late filing penalties, and what to do if you can't pay your taxes. For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post. The federal tax return filing deadline for tax year 2022 is April 18, 2023If you missed the deadline and did not file for an extension, it's very important to file your taxes as soon as possible. Filing with TurboTax is fast, easy and guaranteed to get you the biggest refund you deserve. Why file for an extension?Filing an extension automatically pushes back the tax filing deadline and protects you from possible failure-to-file and penalties. Penalties for filing late can mount up at a rate of 5% of the amount of tax due for each month that you're late.
TurboTax Easy Extension is a fast and easy way to file your extension, right from your computer. How long is my extension good for?If you filed an extension by April 18, 2023 (2022 tax year filing deadline), it extends your filing deadline to October 16, 2023.
What if I didn't ask for an extension?The consequences differ depending on whether you owe the IRS money or the IRS owes you a refund. If you are getting a refundThis is one of the great little secrets about the federal tax law. If you have a refund coming from the IRS—as about three out of four taxpayers do every year—then there is no penalty for failing to file your tax return by the deadline, even if you don't ask for an extension. However, this might not be the case for state taxes. That's not to say there aren't very good reasons for filing on time. Even if you have a refund coming, consider the following:
If you have a balance dueIf you haven't paid all of the tax you owe by the filing deadline:
If you didn't get an extension
Beware: No statute of limitationsRegardless of whether you are due a refund or owe, there is another point to keep in mind: If you never file your return, there is no limit on how many years the IRS can go back to assess and collect tax. What if I owe the IRS but can't pay?If you find yourself in this situation, you have a few options available, such as:
You can also simply file your return and wait for the IRS to bill you, but don't be surprised if the bill includes interest and penalties. Typically, the failure-to-pay penalty is less than the failure-to-file penalty so you likely should file even if you can't pay the tax. Can I pay my tax by credit card?Yes, you can pay your tax bill with credit in a variety of ways. Credit card and bank loans are both payment options. You can apply for a bank loan, home equity loan or take a cash advance on a credit card to pay your tax bill. Third party providers like Official Payments Corporation are also available to facilitate using a credit card to pay your tax bill.
Can I pay my tax in installments over time?If you find yourself owing more than you can afford, you should still file a return.
About 2.5 million taxpayers are paying off their bills under such an arrangement and recently the IRS made it easier to qualify. In the past, before the IRS would okay an installment plan, the agency demanded a look at your finances—your assets, liabilities, cash flow and so on—so it could decide how much you could afford to pay.
Don't think the IRS is a patsy, though. You may be better off if you can borrow the money to pay your bill, rather than go on an installment plan which means, effectively, borrowing from the IRS.
Does the IRS ever negotiate the amount owed?Under certain circumstances, the IRS is authorized to resolve a tax liability by accepting less than full payment. An "offer in compromise" is an agreement between a taxpayer and the IRS that settles the taxpayer's tax debt. There are three circumstances under which the IRS is authorized to compromise:
Form 656: Offer in Compromise Package should be completed to file an Offer in Compromise with the IRS. Included with the Form 656 package are Form 433-A, Collection Information Statement for Wage Earners & Self-Employed Individuals and Form 433-B, Collection Information Statement for Businesses.
Can I get an extension of time to pay my tax?An extension of time for payment of tax can be filed with the IRS on Form 1127: Application for Extension of Time for Payment of Tax, but the legal requirements are strict:
When approved, extensions to pay are generally limited to six months. Plus, the IRS requires some acceptable form of security before granting an extension of time to pay. The security may be in the form of a bond, notice of lien, mortgage or other means, depending upon individual circumstances. There are times when extensions are granted especially due to federally declared disasters. You can check for additional relief information on the IRS Disaster Relief page. Remember, with TurboTax, we'll ask you simple questions about your life and help you fill out all the right tax forms. With TurboTax you can be confident your taxes are done right, from simple to complex tax returns, no matter what your situation. All you need to know is yourselfAnswer simple questions about your life and TurboTax Free Edition will take care of the rest. For simple tax returns
only Real tax experts on demand with TurboTax Live BasicGet unlimited advice and an expert final review. Done right, guaranteed. For simple tax returns only
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business. |