“Wait, filing a tax extension doesn’t mean I can pay later?” Nope. You still owe it on April 15th.
I know. I bet you have a furrowed brow and just reread that sub headline again. Sadly though, it’s true. Filing a tax extension doesn’t mean you’re excused from paying your taxes by April 15th.
Think of it this way, the tax extension you may have just filed = time to gather documents and prepare your return, not pay money owed. Uncle Sam still needs that money you owe him. And if you don’t pay, well we’ve covered those tax penalties and fees already. If you do owe, don’t grab for that paper bag just yet, you have some options.
Here are some steps you can take to lessen that blow if you owe:
- File your extension by April 15th
- Pay what you can by April 15th – you need to avoid the late fees.
- Contact the IRS at 1-800-829-1040 to discuss payment plans and options.
The IRS understands not everyone has the money to pay right away. So you have a few options based on your needs:
- Short-term Extension – it’s just that, a negotiated extension from the deadline to pay the amount that you owe. You’ll negotiate with an IRS agent assigned to your file, and must meet certain criteria.
- Installments – You’ll work with an IRS agent to negotiate a longer term payment solution, and pay installments rather than a lump sum. Be aware, though, you may be charged interest on the amount owed, and a separate fee to set up your installment plan.
Paying Uncle Sam
Once your payment method is determined, it’s easy to pay. Choose to pay electronically by credit or debit card, by check or money order, or by wire transfer.
For more information on payment options, we suggest jumping over to the IRS’s site and taking a look for yourself.
We like free, and think you should keep more of your money. We bet you agree, and so would your friends and family so share the tax-help goodness by using the Share buttons below. Or you can Like us on Facebook and follow us on Twitter to get more articles like this posted directly to your timeline or newsfeed!