Forget the holiday season. Tax season is the most wonderful time of the year.
Just kidding! I had you fooled for a second, didn't I?
Oh, probably not, because tax season is famously dreaded by Americans all over the country. The dullness and tedium of sitting down and filling out forms coupled with the prospect of having to shell out money to the government is the opposite of a good time.
That's probably why nearly 13 percent of taxpayers waited until the last week possible before that April 15 deadline to file their taxes, according to data from the Internal Revenue Service, as reported by NBC News. And just in case you didn't know, it is that last week.
However, taking a weekend to fill out your tax forms is a lot better than the alternative, which can lead to penalties that include freezing your bank accounts, putting a lien on your house and possible jail time. None of these outcomes are desirable, right?
But if for some reason you miss the April 15 deadline, don't panic. Though you will probably still kick yourself for not filing your taxes sooner, there are steps you can take to ensure that the IRS doesn't come knocking on your door when it doesn't receive your forms by this notorious deadline. Here are six things you can do if you can't pay your taxes by April 15, and not one of them is cry.
1. File For An Extension
Though we are told practically when we step out the womb that April 15 is the day your taxes need to be filed by, it actually doesn't have to be. If you need more time to finish filling out your tax return, you can file for a six-month extension by filling out Form 4868 on the IRS' website. You can also fill out a paper form and mail it in, fill out a form with a tax professional or use tax preparation software to do so. Once you fill out this form, you have until Oct. 15 to file a return. You can also file for an extension to pay your taxes by filling out Form 1127.
2. You May Get An Extension Without Having To Request One
Some taxpayers automatically get an extension in filling out their tax returns without even having to request one. If you're a U.S. citizen or resident alien who lives and works outside of the U.S., you have until June 16 to file, although tax payments are still due April 15. If you're a member of the military currently serving in Afghanistan or other combat zones, you have until 180 days after you leave the combat zone to file and pay your taxes. Those affected by certain recent natural disasters in the U.S. may also have different deadlines.
3. File As Soon As You Can
Even if you can't pay all of your taxes by the due date, you should still file your taxes as soon as you can. That's because there's a failure-to-file penalty, which is five percent per month of the unpaid balance and is usually more than the failure-to-pay penalty of 0.5 percent per month of your unpaid tax balance. Once you file, you can then look at other payment options, some of which are outlined below.
4. Consider Other Payment Methods
Some people miss the April 15 deadline because they don't have enough money to pay their taxes. However, if you don't file your tax return by this date, you may be subject to the aforementioned late-filing penalty. Since you definitely don't want to pay more money than you have to, you might want to consider paying your taxes by credit card, as Money also points out. You still have to pay fees if you use this payment method, but at around 2 percent, they will likely be less than the late-filing penalties you will incur. The Washington Post also suggests taking out a loan from your credit union or bank to pay your taxes, although that could be costly in the future.
5. Do Everything Online
This is the 21st century, people. You basically don't need to be mailing anything these days, so why do your taxes that way? If you miss the April 15 deadline, you're going to want to get your taxes done as quickly as possible, so filing and paying electronically is definitely the way to go. You can pay online through the Electronic Federal Tax Payment System, e-file and e-pay through the Electronic Funds Withdrawal or pay online using a credit or debit card.
6. Pay As Much As You Can
If you can't afford to pay all of the taxes you owe, because of all of the interest and penalties you will incur for paying late, you're going to want to make as much headway on your taxes as possible to mitigate cost. If you owe less than $50,000 in taxes, you might qualify for an installment agreement where you can make monthly payments instead of paying all at once. However, even if you're ineligible for an installment agreement, you still may be able to make monthly payments on your taxes. If you still don't think you can pay the full amount of your taxes because of a legitimate reason or paying the full amount would create a financial hardship, you may be eligible for an offer in compromise. This allows you to pay less than the full amount you owe. You can fill out a questionnaire on the IRS' website to see if you may qualify.