What last-minute tax filers should know
As April 15 quickly approaches, it is important to file your federal and state tax returns on time.
If you are not prepared to file and do not owe, an extension can be requested, allowing until Oct. 15 to complete your individual tax return. The request can be done free online at the Internal Revenue Service website or by sending in a paper copy of Form 4868 (Application for Automatic Extension of Time To File U.S. Individual Income Tax Return) by April 15.
If you need to request an extension and know you are going to owe taxes on your individual tax return, you must send in the amount you believe you will owe.
If you are unsure how much you will owe, there are several free tax estimators on the Internet (Turbo Tax, Tax Caster, HR Block, Tax Estimator and others) that can help to calculate the amount you will owe. This is the amount you will need to send in with the extension. If you cannot send the entire amount, send as much as possible, since interest and penalties will accrue on the amount owed.
If you do not file an extension there are two penalties that are assessed, Failure to File and Failure to Pay. The first penalty (Failure to File) can be eliminated by filing an extension.
If you have filed your tax return and owe the IRS or Utah State Tax Commission, the deadline to pay is April 15. If you are unable to pay all of the taxes owed, sending in as much as you can will reduce the amount of interest that will accrue on the balance. There are several ways to pay the amount owed. The IRS may grant additional time to pay based on your circumstances if requested. This can be done by calling 800-829-1040.
You can pay by credit or debit card. The IRS accepts all major credit cards and does not charge a fee for paying by credit or debit card. However, the service providers that process the payments do charge a flat fee ranging from $3.89
You can request a payment arrangement and self-qualify if the amount owed is less than $25,000 by going to www.irs.gov/Individuals and clicking on “Payments.” If the balance is more than $25,000 a complete financial statement needs to be submitted to the IRS.
You can send a check or money order made payable to the “United States Treasury” with your federal tax return or payable to the Utah State Tax Commission. Never send cash!
Make sure that your name, address, Social Security number, daytime telephone number, tax year and form number are on the front of the payment. If you are making a payment on a joint return, provide the Social Security number that appeared first on the return. When making a payment to the state of Utah, Form TC-546 can be obtained online by going to http://tax.utah.gov and clicking on “Current Forms” under the “Forms” tab.
If you make a payment in person at an IRS service center or the Utah State Tax Commission, be sure to keep the date stamped receipt as part of your records.
Corporations and Individuals automatically get an extension of up to six months from the state of Utah to file a return (this is not an extension to pay taxes, only to file the return). You do not need to file a form to request the extension. However, penalties will be assessed if you have not met the prepayment requirements by the original due date of the return.
The biggest mistake is to not file your tax return because you owe taxes. Eliminating one penalty can save you money. If you owe taxes, but are unable to immediately pay, use the methods mentioned in this article to satisfy your tax debt.
The IRS can place a lien on your property and even levy wages or bank accounts for nonpayment. Before it gets to this stage, arranging a payment arrangement can help stop more aggressive measures.
Tracy Bunner is an enrolled agent and tax preparer with an office in Harrisville. She can be reached at 801-686-1995 or at firstname.lastname@example.org.Source: www.standard.net