If you cannot pay the full amount when you file,
you can ask for an installment agreement or ask for an extension
of time to pay. Remember your extension of time to file is not an extension
of time to pay. This does not mean that you cannot ask for an extension of
time to pay, it is just that this extension of time to pay will cost you in
interest and penalties.
With our current pay-as-go tax system, taxpayers
are obligated to pay their tax every time they get a paycheck. If the
taxpayer or employer does not follow the pay-as-you-go system, they have to
pay penalties for not making timely payments and also pay interest for the
time that the money was not received on time. The IrS will accept your
return without the payment but will send you a letter asking you for payment
and will have the interest and usually the penalty for not paying your tax
will be calculated in that letter. The worst thing you can do is not send
your tax return.
If you cannot file on time, you can get an
automatic 6-month extension if no later than the date your
return is due, you file Form 4868. In order for your extension
of time to file to take effect, you must file by the due date of your tax
return.
You have to file this extension on or before
April 15 or the due date of your return, which could be either April 16, or
April 17 depending on what day of the weekend or holiday April 15 fell on.
You cannot realize you did not file your tax return by the due date and all
of a sudden decide to send your Form 4868 request for extension of time to
file on April 20th. The Internal Revenue Service processing center probably
receives thousands of Form 4868 after the required due date and they
probably just either toss them away or send you a letter to let you know
that the request for an extension of time to file your return has been filed
late and ask you to immediately file your tax return. Although, they
technically can charge you a late filing penalty, they might waive it if you
comply with their letter and send your tax return immediately.
If you get an automatic extension, you have until
October 15, 2014 to file your tax return but not to pay the tax you owe.
Clear this confusion now, the automatic extension of time to file is not an
extension of time to pay your tax.
Remember, our tax system is based on the
pay-as-you-go system. You must have paid enough money on every paycheck you
received. Upon calculating and reconciling with the Internal Revenue
Service, you must owe an amount that is closer to zero. If you did not pay
enough to cover your tax during the year and you are really off when you
reconcile and file your return with the Internal Revenue Service, you could
be liable for certain penalties for failing to pay your taxes as you earned
your money.
If you changed your name because of marriage,
divorce, etc., be sure to report the change to the Social
Security Administration (SSA) before you file your tax return.
This prevents delays in processing your tax return and also will
prevent any delay in issuing your refund. You want to update your files with
the Social Security Administration (SSA) to safeguard your social security
benefits.
Notify the Social
Security Administration before you
file your tax return with the IRS if you or your dependents changed your
names. The name and the name of your dependents with the Social Security
Administration must match the name with the reports you
file with the Internal Revenue Service. Avoid
