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It's official: Your taxes are due next week. In March, the government extended the filing deadline to July 15, and the Treasury Department has confirmed that they won’t be changing the date again. If you've been delaying, now is the time to submit your tax return and settle your dues.
The deadline is also set for your second-quarter tax payments, which were postponed due to the pandemic. However, your state might have its own due date for quarterly payments. You can visit your state’s tax agency website through the Federation of Tax Administrators for details.
For more insights into personal finance, check out the video below:
Just a reminder, we’ve compiled a list of websites offering free filing options for both federal and state taxes. If you earned $69,000 or less in 2019, you might be eligible to file your taxes without any cost.
If you need more time to file, you can use Form 4868 to request an extension. This grants you extra time until October 15, but your tax payments are still due. The form will ask for an estimate of your tax liability and how much you can pay right now.
What if you can’t pay? Don’t worry, there are more options than you might think. According to the IRS, most taxpayers qualify for one of the following choices.
Online Payment Agreement - If your tax bill is $50,000 or less, you could be eligible for an online payment agreement. Your options include full payment, paying within 120 days, or opting for a long-term plan. You can find details on costs and fees here.
Installment Agreement - If you don’t qualify for the online payment agreement, you can apply for an installment agreement. Applications can be made by phone or mail using Form 9465, and there may be associated fees.
Temporarily Delay Collection - If you can’t pay right now, you can request the IRS to pause collection actions until your finances improve. However, penalties and interest will continue to accrue.
Offer in Compromise - If you are unable to pay your full tax debt, you may be eligible to settle for less than what you owe. You can check your eligibility using the Offer in Compromise Pre-Qualifier.
Whichever option you choose, don’t overlook next week’s tax filing deadline. Failing to file will result in a failure-to-file penalty, which is 5% of your total tax due each month (up to a 25% maximum). In contrast, the failure-to-pay penalty is smaller, only .5% per month.
