CPAs work hard this time of year, but for those of you who do not (or cannot) get your taxes done in time, here are some options that are listed on the IRS site. But don’t wait, the post office will be a mess if you decide to mail something in.
If you need more time to file your return, you can get an automatic
six-month extension of time to file from the IRS. You must file for an
extension by the April deadline. An extension will give you extra time
to get your paperwork to the IRS, but it does not extend the time you have to
pay any tax due. You will owe interest on any amount not paid by the deadline,
plus you may owe penalties. To get an extension:
• IRS Free File – Traditional Free File and Free File
Fillable Forms can both be used to file an extension for FREE. Access the
Free File page at www.irs.gov.
• IRS e-file – Use IRS e-file to request an extension by
using tax preparation software on your own computer or by going to a tax
preparer.
• Form to File – Mail in IRS Form 4868, Application for
Automatic Extension of Time to File U.S. Individual Income Tax Return. It must
be postmarked by April 15, 2013. A CPA can create this for you with your authorization. Just provide your name, address, and social security numbers.
Taxpayers that are ready to file their returns and those that have already
filed and need to pay a tax bill have payment options:
• E-file – File electronically and authorize an electronic
funds withdrawal via tax preparation software or a tax professional. Your CPA can explain the situations when the State of California require mandatory electronic payments.
• Phone – Pay by phone or online using a credit card.
• Mail – Pay by check or money order made payable to the
“United States Treasury.” Be sure to include your name, address, Social
Security number listed first on the tax form, daytime telephone number, tax
year and form number. Complete and include Form 1040-V, Payment Voucher, when
mailing your payment to the IRS.
If you owe tax with your federal tax return, but can’t afford to pay it all
when you file, the IRS has options to help you keep interest and penalties to a
minimum. File your return on time and pay as much as you can with the return,
then:
• Request an installment agreement – Use the Online Payment
Agreement application at www.irs.gov
or by file Form 9465, Installment Agreement Request with your return. The IRS
charges a user fee to set up your payment agreement. Your CPA can represent you on setting this up, but you need to provide a Power of Attorney.
• Additional time to pay – You may request a short
additional time to pay your tax in full using the Online Payment Agreement
application on www.irs.gov.
Taxpayers who request and are granted an additional 120 days to pay the tax in
full generally will pay less in penalties and interest than if the debt were
repaid through an installment agreement over a greater period of time. There is
no fee for this short extension of time to pay.
• Extension of time to pay – Qualifying individuals may
request an extension of time to pay and have late payment penalties waived as
part of the IRS Fresh Start initiative. To see if you qualify visit www.irs.gov
and get Form 1127-A, Application for Extension of Time for Payment. This
application must be filed by April 15, 2013.
CPA’s are always trying to get client’s to plan ahead whether they have businesses, or not. If you are running late this year, this would be a good opportunity to start preparing for 2013. You can accumulate receipts in envelopes and start EXCEL spreadsheets to keep track of them. The reward will not only be your peace of mind, but also you may save more money in taxes next year.
All situations are different, so discuss this with a tax professional before making any decisions.
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IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the U.S. Department of the Treasury and Internal Revenue Service, we inform you that any tax advice contained in this e-mail (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (a) avoiding penalties under the Internal Revenue Code or state tax authority, or (b) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
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