Some Americans may have missed the deadline to pay taxes this year — July 15 — which means the U.S. internal revenue service (IRS) may begin to accrue penalties and interest for late payment, if you do not take precautionary actions to resolve the situation. This writes Fox Business.
“A common reason why people may miss a deadline for paying taxes is that they believe that they can owe, and do not want to deal with it,” said Christina Taylor, head of tax operations at Credit Karma.
However, postponing the payment will only aggravate the problem.
Here are some steps you can take to minimize your penalties if you can’t pay the taxes until July 15.
Submit a Declaration as soon as possible
Even if you missed the deadline for the payment of taxes, the sooner you submit the Declaration, the better.
This is because penalties and interest will begin to accumulate immediately.
If you file and pay your taxes after the deadline, you will likely have to pay a considerable sum. First, you will begin to accrue a penalty for late filing. 5% of the unpaid tax each month up to a maximum of 25%. And the penalty for late payment of tax is 0.5% of the amount you owe monthly, but not more than 25%. If both tickets will need to pay it will greatly hurt your wallet, but if you exclude the penalty for late submission of return, the amount of the fine is reduced to 0.5%.
Pay what you can
Even if you can’t afford to pay the entire tax bill, Taylor advises individuals to pay what they can now, as a means to limit the interest charged.
For example, a person who owes $1000, but paid $200, will receive the penalty assessed in the amount of $800 instead of the full $1000, noted Taylor.
Keep in touch with the IRS
The IRS stated that they expect that fewer people would pay taxes this year, given the financial implications of the outbreak of coronavirus, but you still need to inform the office that you can’t pay your bill, Taylor said.
The Agency readily develops an agreement for repayment, but diligent attitude to your situation will help you to achieve the best result.
Ask for help
If you don’t know what to do or how to cope with their financial situation, consult or seek help from a qualified technician.