|IRS offers help for April 17 deadline|
|Tuesday, 10 April 2012 09:29|
August 17 is the deadline for filing 2011 tax returns. And this year the Internal Revenue Service (IRS) offers much assistance for taxpayers unable to make payments or meet the deadline.
More Time to File
People who haven't finished filling out their return can get an automatic six-month extension quickly through the "Free File" link on IRS.gov, if they apply by April 17. Anyone can use this free service to electronically request an automatic tax-filing extension on Form 4868, giving them until Oct. 15 to file a return. To get the extension, taxpayers must estimate their tax liability and pay any amount due.
With this form, taxpayers can avoid late filing penalties, normally five percent per month based on the unpaid balance applicable to returns filed after the deadline. In addition, any payment made with an extension request will reduce or eliminate interest and late payment penalties that apply to payments made after April 17.
Besides "Free File," taxpayers can file extension requests through a paid tax preparer, using tax-preparation software or by filing a paper Form 4868, available on IRS.gov.
More Time to Pay
Taxpayers should file by the regular April 17 deadline, even if they can't pay the full amount due. But in many cases, those struggling with unpaid taxes qualify for one of several "Fresh Start" relief initiatives, including:
• Online Payment Agreement: Those who owe $50,000 or less in combined taxes, penalties and interest can use the Online Payment Agreement to set up monthly payments for up to six years. Taxpayers can also request a payment agreement by filing Form 9465-FS, which can be downloaded from IRS.gov and mailed along with a tax return, bill or notice.
• Extension for loss of income: Most individuals whose business income dropped substantially can apply for a six-month extension. Eligible taxpayers will not be charged a late payment penalty if they pay any tax, penalty and interest due by Oct. 15, 2012. Taxpayers qualify if they were unemployed for any 30-day period between Jan. 1, 2011 and April 17, 2012. Self-employed people qualify if their business income declined 25 percent or more in 2011. Apply using Form 1127-A.
• Offer-in-compromise: Struggling taxpayers may qualify for an "offer-in-compromise" – an agreement with the IRS to settle the taxpayer's liabilities for less than the full amount owed. The IRS would reject an offer however if they believe the liability can be paid, in full, as a lump sum or through a payment agreement.