The Internal Revenue Service recognizes that many people may be having difficult times financially. There can be a tax consequence to events, such as job loss, health care coverage, debt forgiveness or tapping a retirement fund. The IRS can help you meet your tax obligations.
File your tax return and pay what you can on time
If you cannot pay the full amount of taxes you owe, don’t panic. Even though penalties and interest accrue if you don’t file and pay on time, you can avoid or limit these charges by filing on time, by April 15. Pay as much as you can by the April 15 deadline, because the IRS charges failure-to-pay penalties and interest on any unpaid balance, which increases the amount you owe.
Taxpayers who owe, but can’t pay in full have several options for meeting their tax obligations. They can use the Online Payment Agreement application on IRS.gov if you owe $50,000 or less in combined tax, penalties and interest to request an installment agreement and receive an immediate notification, if they approve the request. An installment agreement allows you to make payments over time rather than paying in one lump sum. If you owe more than $50,000 you may still qualify for an installment agreement, but you will need to complete a Collection Information Statement, Form 433F. Otherwise, contact the IRS to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief, such as a short-term extension to pay, an installment agreement or an offer-in-compromise. Additionally, taxpayers who can’t meet the filing deadline can request an extension of time to file. However, an extension of time to file is not an extension of time to pay.
Keep in mind, if you experience a change in marital, parental or financial status in 2014, you may now be eligible for certain tax credits, such as the Earned Income Tax Credit. If you earned less than $52,427 in 2014, check to see if you qualify for the Earned Income Tax Credit, some workers could receive as much as $6,143. Eligibility for EITC depends on your earned income and family size, among other tests. However, single people and childless workers are also eligible. If you qualify, you must file and claim the credit to get it. The online EITC Assistant can help you calculate your eligibility with ease and accuracy.
Electronic Payment Options
IRS offers various electronic payment options to make it as easy as possible to make a full or partial payment with your tax return. You can make payments online, by phone using a credit or debit card or through the Electronic Federal Tax Payment System. Taxpayers who e-file their return may use the electronic funds withdrawal option for submitting an electronic payment. And, you can e-file before April 15, but schedule your payment for withdrawal on April 15.
For more information about filing and paying taxes contact one of our offices: Plymouth 734.454.4100, Allen Park 313.388.7180, Grayling 989.348.4055, Royal Oak 248.399.7331, Saginaw 989.782.1985, St. Clair Shores 313.371.6600