Don’t miss the Oct. 15 Tax Extension Deadline
Did you file an extension for your 2020 federal income tax return? If so, you have about 2-weeks remaining to file your individual return, as it is due on or before October 15, 2020. A tax extension gives you additional time to file but does is not an extension to pay your taxes.
What happens if I miss the October tax extension deadline?
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You’ll owe more interest. A tax extension gives you more time to file your return, not more time to pay.
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You may owe a higher late-payment penalty. You’re supposed to pay at least 90% of your tax liability by the regular filing deadline.
You may owe a late-filing penalty. The IRS can also sock you with a late-filing penalty of 5% of the amount due for every month or partial month your tax return is late. The maximum penalty is 25% of the amount due.
Don’t neglect filing just because you can’t pay the bill. The IRS offers installment plans if you can’t pay your taxes.
An IRS payment plan is an agreement you make directly with the agency to pay your federal tax bill over a certain amount of time. There are two kinds of IRS payment plans: short-term and long-term.
Typically you’ll make monthly payments to settle what you owe. So long as you’re keeping up with that, the IRS usually won’t garnish your wages or seize any bank accounts or property. But getting on an IRS payment plan doesn’t get you out of interest and penalties for late payment; those accrue until your balance is zero.
You don’t need to call the IRS to get on a payment plan. You can apply online if either of these situations apply to you:
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You’re applying for a long-term payment plan, you owe $50,000 or less in combined tax, penalties, and interest, and you’ve filed all your tax returns.
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You’re applying for a short-term payment plan and you owe less than $100,000 in combined tax, penalties and interest.
Contact Clergy Financial Resources to help you with the next steps.
Clergy Financial Resources
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Fax: 1 (888) 876.5101
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
For more information or if you need additional assistance, please use the contact information below.
Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (888) 421-0101
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com