Tim’s Tax News on the Tenth – March 2020

Tax season is in full swing and the initial filing deadline for individual taxpayers is next month. Will you owe more tax than you can afford to pay when it comes time for you to file? If so, do not fail to take action to minimize your liability. Make sure to file on time even if you cannot fully pay your tax. That way you will not have a penalty for filing late. Here are some tips on what to do if you cannot pay all your taxes by the filing due date.

• First, no matter what, file on time and pay as much as you can. You should file on time to avoid a late filing penalty that can grow to as much as 25%. Pay as much as you can with your tax return. The more you can pay on time, the less interest and late payment penalty charges you will incur.
• You can now pay online with IRS Direct Pay. IRS Direct Pay is their recently created electronic payment option; it allows you to schedule payments online from your checking or savings account with no additional fee and with an immediate payment confirmation. To make a payment or to find out about your other options to pay, you can visit www.IRS.gov/payments.
• Concerning any unpaid tax pay the rest of your unpaid tax as soon as you can. If it is possible, get a loan or use a credit card to pay the balance. The interest and fees charged by a bank or credit card company may be less than the interest and penalties charged for late payment of tax.
• The unpaid tax may be able to be paid through use of the IRS Online Payment Agreement tool. You do not need to wait for the IRS to send you a bill to ask for an installment agreement. The IRS Online Payment Agreement tool can be found at www.IRS.gov/payments. 
• If you receive a tax bill from the IRS do not ignore it. The IRS may take collection action against you if you ignore their bill. Contact the IRS right away to talk about your options.

If you cannot file on time then you should file for an extension. The extension is automatic if filed timely and is good for six months; to give you time to prepare an accurate return. The extension is only for the filing of the return, the payment of the taxes due will still remain April 15th so pay as much as you can by the tax deadline if you file for an extension. 

If you would like more details, please do not hesitate to call our office. Our office has been successful in helping taxpayers with IRS and IDOR collection problems for over 28 years. If you have a tax or debt problem, please contact me at 847-705-9698 or thughes@lavellelaw.com and find out how we can help you.

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Lavelle Law, Ltd. is registered with the Illinois Department of Financial and Professional Regulation as an approved continuing education provider for CPE for CPAs and Enrolled Agents. If your organization is seeking CPE courses in the area of Business Law, Innocent Spouse Relief, IRS Collections, Tax Scams (including ID Theft) or other areas in tax law that can be taught at your office, please contact me at thughes@lavellelaw.com.