I’ve never had any problems with taxes before – I usually made so little as a student that I got everything back. So, stupid me, I put off doing my taxes this year until yesterday, figuring I’d e-file my usual, get my refund, no problem. Except there is problem. Much fucking problem.
I made more money last year, plus I got a qualified tuition reduction from the state. So I managed to make slightly more than will make me eligible for an earned income tax credit, and I don’t have any tuition expenses to write off, and I didn’t withold enough to cover anything, so now I owe $400. And it’s due tomorrow. And I don’t have $400. I have a car which I was planning to sell this weekend so I could pay my next month’s rent + expenses, and a job which starts at the end of May, and an internship I’m working at which doesn’t pay me anything. I have no money. I can’t get my car sold until the weekend.
The worst thing is that I really can’t blame this on anyone but myself – why oh why did I wait until the last minute? Why didn’t I think about how my tax situation might have changed? I’m in panic mode now, because I can’t imagine what to do when I owe the I-fucking-RS money that I don’t have. Should I write a check & hope it isn’t cashed until next week? What can I do? How do I pay my rent in that case?
I don’t think you can get an extension to PAY, you can only get an extension to file the return. I am not a tax lawyer nor am I an accountant so I could be wrong.
First and most important: mail your return tomorrow! Period, or exclamation point I guess. Without a check.
It’s going to take a while for them to get back to you with a bill, by then perhaps you will either have the money or be in a position to take a loan. You will also have opportunity to set up a payment plan with the IRS if that’s what you decide to do.
There will be penalties and interest involved, so it won’t be $400 anymore, but those P&I pale by comparison to the cost of not filing on time. Really, I can’t emphasize it enough: mail your return on time.
“Should I write a check & hope it isn’t cashed until next week?” Um, no. Bad idea there! You don’t want your check to the IRS to bounce.
I’ve never done this, but a lady that works for me requests an extension of time almost every year, and winds up paying her taxes in August. You could check out how to do that, where to get the form and how it works.
If you’re on good terms with a banker, tell him what you posted here. Maybe you can get a short term loan.
Surely, somebody that knows more than I do about this will be along shortly. In the meantime, don’t commit suicide or somethin’ like that… :eek: There will be a way out for you.
I believe that if you file for an extension, you can pay later. You’ll have to pay interest on the payment, but I think you won’t have to pay penalties.
Consult a tax expert or the IRS website (and I know that the former does not equate the latter) for useful info.
I don’t know about Federal extensions, but in my state manual they say:
Inability to pay does not qualify you for an extension. In bold red print. I guess you’ve got to have a seriously grievous reason to delay filing, but hell if I know any more serious reason than lack on money.
I suggest taking a look at the page DeadlyAccurate linked. I know my mom and dad have done the installment payments before.
I’m without a credit card (which is just as well, considering how indifferent to money matters I am).
Thanks for the links to payment plans. I suppose I’ll have to go that route if I can’t find someone who wants to loan me the money on short notice. Even so, it’s gonna hurt. A lot. I was really expecting to get a return.
Thanks for the kind words – I’m not contempating suicide so much as living as an outlaw in Mexico.
Well. This was a good prompt to get me registered before the higher-price deadline.
The straight dope is, an extension does NOT buy you more time to pay; the tax you owe is indeed due on 4/15, whether you choose to file an extension or not. You should file your taxes by the due date 4/15.
You will incur penalties and interest, but don’t despair. Keep a cool head and follow This Year’s Model’s advice. The IRS won’t be beating down your door and dragging you off to prison. Wait until they bill you for tax, penalties, and interest, and use that time to formulate a plan as to how you will pay.
You have my sympathies. A couple of years ago the tax man got me too, and I ended up forking over $700. I had it, but had to borrow money to eat for the rest of the month.
Look here for information on what you can do if you can’t pay - including setting up a payment plan. It’ll cost you more than the base amount you owe, but it’s probably better to use their methods for setting up a payment plan than to simply not pay and let penalties accumulate.
I work in a CPA firm. An extension gives you additional time to file a return. Any taxes owed are due on the 15th (postmarked by then, anyway).
My advice would be, as other posters have suggested, to go ahead and file the return and wait for the total + interest/penalty fees to come back from the IRS.
From there you can set up a payment plan and pay the total owed in fairly small increments (usually four, but they will work with you on that). However, the payment plan adds separate fees to the total as well.
So, once you get the dreaded letter from the IRS listing your fees, you have the choice of paying it off all at once or paying a certain amount/month that will eventually end up costing you more money in the long run (pretty much like any other debt that you might owe).
It’s a PITA, but it’s not the end of the world. Don’t panic…our clients do this all the time and no one is homeless or in jail.
Pseudo-tax attorney checking in, who just e-filed his own taxes. The advice to file your tax returns by 15 April is a good piece of advice. Do it. You can always amend your return if you think of any deductions that you may have missed.
One other piece of advice that has not been offered, is sending a check along with your return, for whatever you can reasonably afford. Even though it won’t cover the whole tax bill, it will serve to minimize the penalties and interest that will accrue.
There is a link on the msn homepage right now called “The 10 Worst Ways To Pay Your Tax Bill.”
The last entry on the list says:
Pay off the government monthly.
For an initial $43 set-up charge, the IRS will let you pay on the installment plan if you file Form 9465, Installment Agreement Request. The current interest rate is 5 percent annually, but the IRS adjusts it quarterly so it will go up when the rest of the rates head that direction. And while the government payment plan will cut your late payment penalties in half (to one-quarter percent per month), on a $300 balance that saves you less than 50 cents a month. Plus, you have to give the IRS permission to attach your bank account if you fail to pay.
Eva Rosenberg, publisher of TaxMama.com, says if you’re confident you can pay what you owe before the end of 2004, don’t file the installment agreement. That way you save the $43 upfront fee and don’t hand over your bank account information to the IRS. Instead, Rosenberg suggests you simply file your taxes and send the IRS as much as you can afford on April 15. Then save up and send money every time the agency sends you a notice about your balance due.
But be very careful. If you’re not disciplined enough to pay off Uncle Sam without the paperwork, if yearend arrives and you find you owe 2004 taxes and you’ve still not paid off your 2003 bill, you’ll be in instant default. In this case, and the penalties and interest are brutal.
The entire article is here, but the rest of the entries on the list are more like “what not to do” guidelines. This is the only one that seems like a good idea, unless you want to pay off interest on this $400 later on.
