What to do if you are unable to meet the tax deadline

Maximize Your Tax Strategy with Smart Payment Options

When it comes to taxes, the looming deadline of April 15 can bring stress and uncertainty. But did you know that even if you can’t pay your taxes in full, it’s crucial to file your return by the deadline? Ignoring this step can lead to compounding interest and penalties that can put you in a worse financial position.

According to Eric Bronnenkant, a certified financial planner and head of tax at Betterment, “Your interest and penalties are compounding quicker” if you owe taxes and fail to file. The failure-to-file penalty can be as high as 5% of your unpaid taxes per month, capped at 25% of your balance due. On the other hand, the late payment penalty is 0.5% per month, with a maximum fee of 25% of unpaid taxes. The IRS also charges interest based on current rates.

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Exploring IRS Payment Options

If you find yourself in a situation where you can’t pay your taxes by April 15, don’t panic. The IRS offers various payment options that could provide relief and prevent further financial burdens.

One option is a short-term payment plan, which allows you to pay in full within 180 days if you owe less than $100,000 including tax, penalties, and interest. Alternatively, a long-term payment plan can be considered if your balance is under $50,000, giving you up to 72 months to pay off the amount in monthly installments.

Applying for these payment plans is quick and easy, with online, phone, or mail options available. The IRS aims to help individuals get back on track and avoid continuous payment plans from different tax years.

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Under an installment agreement, the failure-to-pay penalty is reduced, making it a more manageable way to settle your tax dues. While interest and late-payment penalties continue to accrue, having a structured payment plan can alleviate immediate financial strain.

Empower Your Financial Future

At Extreme Investor Network, we understand the importance of smart tax strategies and financial planning. By taking advantage of IRS payment options and staying proactive in managing your taxes, you can secure a better financial future for yourself.

Ready to learn more about maximizing your tax strategy and exploring payment options? Contact us today for personalized guidance and expert advice tailored to your financial goals.

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Remember, filing your return by April 15, even if you can’t pay, is a crucial step towards financial security and peace of mind. Let us help you navigate the complexities of personal finance and set you on the path to success.

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