Should you require more time to pay your 2011 taxes this year, read this.
If you owe the government taxes this year, you might be happy to discover that there are options available for individuals that cannot pay the amount in full immediately.
There are 10 pieces of IRS information that you should know about filing a tax extension.
1. If the amount cannot be payed in full, it is best to at least pay as mush possible now. Doing this will help avoid penalties and compounding interest, lessening the overall total in the long run.
2. With qualifying circumstances, the amount of time allowed for payment could be extended. Other possibilities are payments that can be made in installments, or a delay in the time for payments.
3. If there is no way to pay the amount in full, do not procrastinate in contacting the IRS. The number will be located on the tax bill.
4. Since interest rates on most bank issued credit cards and loans are less than those of the tax bill, it may be in your best interest to use one of those methods to pay the tax bill instead.
5. Extensions of up to three months to pay in full are possible. There is no fee associated with this extension, and it protects the tax payer from additional fees and interest.
6. Installment payments can be made after a fee of one hundred and five dollars. If using direct bank withdrawal, or automatic debit card payment, the fee is reduced to fifty-two dollars. Tax payers in the lower income bracket could qualify for a fee of only forty-three dollars. These fees are one-time only.
7. To set up installment payments, an application on the IRS website needs to be completed. Form #9465 should be filled out in full.
8. It is possible to negotiate the amount you owe. The results vary on a case by case basis, but do not be afraid to ask for a lower total.
9. Be aware that a Tax Lien filed by the IRS on behalf of the government may still be filed. This serves to secure the interest owed until the balance is paid in full.
10. Do not ignore correspondence from the IRS. The IRS can and will take action unless they hear from you.
For more information, visit the official IRS website.