📕 April 15 was the federal deadline for most taxpayers to file returns and pay taxes, even with a lien extension, which moves the filing deadline to October 15.
Now, if we’re having trouble covering the full amount of taxes, at Wave Tax we always recommend filing by April 15 and paying what you can. Here are a few reasons:
- Interest and penalties accrue faster if you owe taxes and don’t file.
- The penalty for failure to file is 5% of unpaid taxes per month or partial month, capped at 25% of the balance due.
- In comparison, the late payment penalty, or non-payment penalty, is 0.5% per month or partial month, with a maximum rate of 25% of unpaid taxes.
- The IRS also charges interest based on prevailing rates.
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📝 On the other hand, if we have a tax balance as of April 15, we can apply for several payment options online and get an immediate response of acceptance or denial, according to the IRS. The plans are:
- Short-term payment plan: may be available if less than $100,000 is owed, including taxes, penalties and interest, and grants up to 180 days to pay in full.
- Long-term payment plan: This is available if the balance is less than $50,000, including taxes, penalties and interest. It is paid monthly and gives up to 72 months to pay off the balance.
📮 Both can be requested online, by phone or mail by sending Form 9465, but at Wave Tax we suggest the online option, which is quick and easy.
🛑 Don’t forget that after April 15 interest and late payment penalties continue to accrue, but the penalty for non-payment is halved in an installment agreement.
❌ And also, you cannot have several payment plans from different tax years.
✅ If you have any comments or questions, at Wave Tax we advise you strategically and maximize your company’s tax efficiency. Contact us at info@wavetax.us