With the Filing deadline for the 1040 approaching in April, it is a good time to begin assessing your financial situation and to make some decisions. There are two major decisions you can make before the date: either send off the tax return or begin seeking an extension before the date. The following set of options will help anyone having worries about whether or not they can pay up on time.
At the least, file for an extension on time
There is a long list of excuses for not being able to file an extension form and yes it true there may be no IRS penalties and or interest, however, this is almost always not worth it. Here are some good reasons to support this claim:
-Refunds are a possibility. If you do not bother to file a return or an extension, you simply will not have a chance at a refund. Furthermore, if there is a tax loss for you this year in 2016, you may be capable of claiming extra funds as early as 2014 and or 2015 so long as you do file the return for 2016.
-Filing a return will begin the 3 year commencement for the statute of limitations that allows the IRS audit to eventually begin. However, if you do not, the IRS could choose to just audit five years from now and then choose to slap on a penalty bill with interest as well.
Bottom line, file for an extension at the least and begin planning to use either of the methods described below:
Save extra cash using installment agreements
The next natural question may be to ask when the best time to pay off the due balance is. The truth would be to pay it as soon as possible as to prevent any IRS interest charges. This can be done through an installment agreement loan from the IRS that you can file for when you submit your tax return. The form to file is called a 9465, and should be done by April 2016 or October 2016 depending on whether you do the extension or not along with the loan plan.
So long as you have a credit card that has a reasonable one-time fee and interest rate, and a plan to pay off the debt, paying your tax bill with the card could prevent all of the issues discussed above.