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How to Pay Outstanding Tax Debt (Final Days to File!)

All across the country, last-minute tax filers will be scrambling to complete their tax returns this weekend to ensure that they get them out on time. If you waited until now, things may be a little more stressful than usual, but we're here to help. 

As you put together your tax return this weekend, it's possible that even if you and your tax preparer find all the tax credits and deductions you’re eligible for, you may still owe money to the IRS. This part may be the most stressful aspect of tax time for many people. When you're ready to pay, there are a few options for fulfilling your tax obligation.

Ways to Pay

The IRS gives people three ways to pay: by check (or money order), over the phone, or online. If you’re paying by check or money order, be sure to make it out to the United States Treasury, not the IRS. Also be sure to complete form 1040V, the payment voucher, to submit with this check and your tax return. 

Alternatively, you can use the Electronic Federal Tax Payment System (EFTPS) online or by phone to make your payment. It’s free, available 24/7 and let you schedule payments in advance. Visit EFTPS.gov and sign up to get started. If you e-file, you can also choose to complete a withdrawl from your savings or checking account (this is a service we offer for customers who e-file at our offices). Finally, you can also pay using your credit or debit card, no matter how you file your return. You can pay by phone, internet, or efiling. However, there will be a fee charged for those using credit or debit cards, charged by these third parties, not the IRS.

If You Can't Pay

We’ve already talked about options for what happens if you can’t pay all of your tax debt right away. But it’s worth mentioning what happens if you simply choose not to pay.  Legally, the IRS must take action to collect outstanding tax debt owed. Future refunds, if you qualify for them, will be put toward you tax bill. The government may also file a lien against your property or seize your salary and/or accounts through a tax levy. 

Finally, don’t forget to file an extension if you feel you won’t be able to gather all of your tax information and get your return completed by Monday, April 15th.

Remember that all of our Instant Tax Service offices will be open on the 15th to help you get your taxes filed on time.

How to File a Tax Extension

The countdown to tax day has begun. Have you filed your tax return yet? There are just two weeks left to get all of your paperwork in order and file your tax return to avoid any penalties and fees. Every year, we speak to thousands of customers just like you who waited just a few days too long to file, and ended up regretting it.

That's why we work with you to process your tax return as quickly and painlessly as possible. But what happens when you know there's just no way you can get your paperwork together on time?

Apply for a Tax Extension
If you're not going to be able to complete your tax return on time, you can complete IRS Form 4868Application for Automatic Extension of Time To File U.S. Individual Income Tax Return or file a paper version by mail. When you file electronically, you will receive an automatic confirmation for your records. The tricky part here is that just because you applied for a tax extension doesn't mean you have applied for an extension of your time to pay what you owe (if you owe).

You are still required to enter your adjusted gross income on the form and encouraged to pay all of part of your estimated taxes when you file your tax extension. That's right - just because you file for an extension doesn't mean that you have extended the time you have to pay your taxes due. If you think you will be unable to pay the amount you owe, you will need do go through some additional steps.

We can help you file Form 4868 electronically directly from our offices, and also get your tax return started, so that once your paperwork is in order, completing the return should be fast and painless. You are going to need a rough draft of your tax return anyway in order to complete estimated taxes and pay what it's estimated you owe.

Extension Because You Can't Pay? File On Time Anyway.
If you want to file a tax extension because you can't pay the taxes you owe, it's actually better to file your tax return on time and then request a payment plan from the IRS (details here). Pay as much as you can at the time of filing. Making a good faith effort to meet your tax obligations goes a long way. If you are simply unable to make payments due to illness, extreme hardship, or other reasons, call the IRS directly at 800.829.1040 to discuss your situation.

How Does Filing an Extension Benefit Me, Then?
It might seem like filing a tax extension doesn't actually save you much time and effort. You still have to pay estimated taxes on time. However, it's important to note that the penalty for not filing your tax return at all is 5% per month (up to a maximum penalty of 25% the amount you owe, not counting interest). But the penalty for failing to pay all of your tax on time after filing your extension is 0.5% per month (not counting interest). So in the long run, if you really can't get your paperwork together to file on time, filing an extension could save you a lot of money and headache.

Tax Filing Deadline is Coming!

For those of you putting off doing your taxes until the last minute, be happy that this year’s tax deadline is April 15th. What’s so happy about that? 

From 1918 to 1955, tax day was March 15th, not April 15th, giving taxpayers even less time to put all of their tax information in order. If that sounds crazy, remember that many taxpayers who wait until the last minute actually wait right up until the day before (or day of!) filing in order to complete their taxes.  So whether it’s March 15th or April 15th, many folks still spend about the same amount of time putting their information together.

Tax Day has changed quite a bit in our history. We didn’t even have an income tax requirement until 1861, when the Revenue Act was created to help fund the Civil War. Later declared unconstitutional, this tax method was later reintroduced and ratified in 1913 with the 16th Amendment to the U.S. Constitution.  Back then, the tax filing deadline was March 1st, and moved to the 15th of March in 1918, where it remained until 1955.

At Instant Tax Service, we’re big believers that the sooner you file, the better life will be. Many of our customers who wait to file until the last minute admit that they’ve been stressed about filing for six weeks or more by the time they come and see us. And no one needs more stress at tax time! 

Tax season doesn’t have to be stressful. All most taxpayers need to get their taxes completed are their W-2’s and social security numbers. If you’re self-employed and have business expenses, things may be a little more complicated. When you visit us, please bring your self-employment records, including income and expenses, and we can help you get everything sorted out.

We urge taxpayers to come in this time of year because it’s also one of the least busy times at our offices. Things really start to pick up in April, so act now to beat the rush. Fewer lines means faster filing, and the possibility of getting the amount of your tax refund cash even faster.

This year’s tax deadline is Monday, April 15th. That means you need to have your tax return in the mail and postmarked by that date (or efiled) or you risk being assessed fines and penalties from the IRS.  If you need a little extra help getting your information in order, don’t hesitate to contact your local Instant Tax Service office. We’re here to help!

IRS Tax Refund Delays

If you’re counting on a big tax refund that still hasn’t arrived… you’re not alone. 

The IRS is running behind on processing tax returns this year, due to a number of factors. The biggest delay occurred earlier this year when Congress dragged its feet over passing the now infamous “fiscal cliff” legislation. This legislation included a number of changes, extensions, and/or updates to tax rules and regulations that affected this tax year. Most years, the IRS has plenty of time to incorporate these changes into their hundreds of forms and instruction manuals...but not this year.

Delaying this legislation put everyone behind, and tax season opened over a week later than usual. Updates to tax forms also took a long longer than anticipated, and many taxpayers have discovered that they could not fill out the paperwork to claim certain credits until mid-February or March.

We are seeing a number of disappointed taxpayers in our stores this season who are rightfully upset at these delays. It’s something we take very seriously, and we are doing everything we can to ensure that customers get the amount of their tax refunds as soon as possible. However, the IRS continues to delay the processing of many tax returns.

The IRS has also recently increased their scrutiny of tax returns. The more tax returns receive this kind of attention, the less quickly they are processed. To ensure that your tax refund reaches you as quickly as possible, check your tax return for these common errors:

  • Ensure that all Social Security Numbers match the numbers issued on your, your spouse's, or your dependents’ Social Security Cards
  • Take a second look at the mailing address on your tax return. Does it reflect your current address, or is it a prior residence?

  • Verify that you’ve done the math right! If you don’t use a tax preparation service, always ensure that a second person you trust (preferably a family member) reviews your tax return for common math errors. They can even help you verify personal information.

If you are using the IRS’s “Where’s My Refund” tool, keep in mind that it’s only updated once every day. Checking multiple times a day isn’t likely to produce a different result! The IRS is still committed to processing refunds in less than 21 days. However, up to 10% of refunds may not be processed that quickly, and it’s impossible ahead of time to determine which tax returns will be delayed due to increased scrutiny or processing issue, and which will not. Please be patient.

As always, we here at Instant Tax Service are happy to work with our customers to get them the amount of their tax refund as quickly as possible. We are working closely with our customers and are staying informed of IRS delays and processing updates.

Who Needs to File a Tax Return?

Come tax time, we hear from all sorts of people who aren't sure if they are required to complete a tax return. Many even believe that not paying the income tax they are responsible for isn’t a crime at all, and they cannot be prosecuted (sadly, these taxpayers are often in for a nasty surprise). But more often, we find ourselves talking to taxpayers who don't realize that even if they aren't required to complete a tax return, it's actually in their best interests to file anyway, as they may be eligible for significant tax refunds based on their eligibility for certain tax credits. 

In general, the vast majority of Americans will file tax returns each year, and are required to do do.  Those who are not required to file tax returns, however, often do anyway to take advantage of their eligibility for these tax credits. To determine if you are required to file a tax return, you’ll need to know a few things about your personal situation:

  • Your citizenship status and filing status (head of household, single, married filing jointly, etc.)

  • Your income from both inside and outside the U.S.

  • All federal income tax withheld from your earnings

  • Your gross income information (usually this comes in the form of W-2’s, or if you are self-employed, rely on your own records)

Whether or not you must file a tax return depends on your age and income level. Because this varies, the best way to determine your eligibility is to complete the IRS’s interactive worksheet. It should only take a few minutes.

If, after completing the worksheet, it turns out you are not required to file, be sure that you don’t also qualify for certain tax credits would could result in a big refund. If you don’t file a tax return, you cannot receive the dollar amount of these credits, even if you qualify. Credits you may be eligible for which could result in a significant refund include the Making Work Pay Credit, the Earned Income Tax Credit, Child Tax Credit,  Education Credits or Health Coverage Tax Credit.

To determine your eligibility for these tax credits, visit IRS.gov or contact your local Instant Tax Service office. 

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