Sooo… some people I know find that they actually owe over $300 in taxes. These people have never owed taxes before and didn’t expect to… so what happens to these people I know (who work paycheck to paycheck BTW) if they, oh, say… don’t have the money the gubermint so desperatly wants???
Suppose the gov’int has payment plan options? Should the people in question just mail what they can now and worry later?
The safest option is to mail your (errr, your friend’s) return now with as much money as you can afford. The IRS has payment options which you can use to make up the rest. But if you don’t file, that’s tax evation, and that’s bad. Even if you don’t pay anything on time, as long as you send your return, you should be mostly OK.
I was in this position a couple of years ago. There is a form you can file asking to set up an installment plan, but I don’t recommend using it. If you ahem I mean your friend pays what they can, the IRS will send a letter saying “you still owe this much” and if you then pay, again, only part of it, several weeks later they will do it again. This will go on for some time. Best of all, this delinquent payment will NOT go on your credit report.
They should, however, file by midnight tonight as Friedo suggests. if they file but don’t pay on time, the interest and penalties are a tenth as serious as if they don’t file.
In the estimable words of my account, Bill, ‘pay what you can, they’ll bill you for the rest’. Mrs Chance and I ended up owing the feds about $1500 last year (wasn’t that a piece of unwelcome news. I’m glad Bill took my reaction so well. Though, of course, he had his assistant do our taxes this year. Hmm…)
The IRS will make it SIMPLE for you to pay your tax liability with a credit card…DON’T DO IT. Think of the interest on that card, the penalty for failure to pay in full in a small fraction of the average credit card APR. Pay what you can and wait for the friendly note from Uncle Sugar.
No one came to our place and busted kneecaps, after all.
I repeat, pay what you can and pay the rest in the next few months.
On reflection, Bill also told me that I needn’t wait for the IRS note. I could just send another check and a note stating that it was for the tax liability on our social security numbers.
Either way, failing to file is bad bad bad. Just because they let you play the system doesn’t mean they have a sense of humor if you play too much, if you get my drift.
Pay what they can now, it’s take the Gub’mint WEEKS if not more to get back to them. Keep the addy of the IRS ofc handy, and send checks when they can, writing in the memo space “1040 - 12/31/00 - (SSN of Taxpayer)”. Chances are it’ll be paid off before the Revenuers figure out it is missing. I had a very nasty surprise in the $6700 range several years back. I HAD to do the installment.
Another possible option is to file for an extension. That page should give you links to all of the instructions and printable forms you’ll need.
You’ll get tagged for a little bit of interest, but it’s worth the price of the sling your… friend’s… ass will be in if something doesn’t go out today.
…the IRS stormtroopers snatch you away and you spend the next 6 months in Area 87 painting the Black Helicopters…
…seriously, pay what you can, and they’ll work out installments. So long as you keep giving them money, they’ll be reasonable.
Will you look at those morons! I paid my taxes over a year ago!
Whammo, when I see you on the side of the road picking up garbage as part of your work release program, I’m going to throw a cantaloupe at you.
Nope. Filing for an extension gives you more time to file the paperwork, but it does NOT extend the deadline for paying. If whammo’s friend has the paperwork ready to go, there is nothing to be gained by filing for an extension.