hand holding wood cube block with TAX text . Financial, Management, Economic, business and time to tax concept
For most taxpayers, the deadline for submitting these overdue 1,040 to the IRS is April 18. The people of Maine and Massachusetts have until April 19.
The IRS may have owed you hundreds of dollars. But the government is one week away from saving that money forever if you don’t take action.
“There is only a three-year window under the law to claim these refunds, which is close to a tax deadline of April this year,” IRS Commissioner Chuck Rhett said on March 28. “We want to help people get these refunds, but we have to file a tax return for 2018 before this deadline. “
The IRS estimates that the average amount due to taxpayers who do not file their returns is $ 813. Half of these refunds will be higher and half less than $ 813.
The state with the highest potential median reimbursement is Alaska ($ 969). The lowest in Idaho is $ 686.
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In addition, some of those who did not file a declaration for 2018 may be eligible for a tax credit on earned income. The Earned Income Tax Credit (EITC) helps low- and middle-income workers and families get tax benefits. If you meet the requirements, you can use this offset to reduce the taxes you have to pay – and possibly increase your refund. The EITC this year was up to $ 6431. The
Forms 1040, 1040-As, and 1040-EZ for 2018 can found on the IRS.gov website.
Those who do not have W-2 or other forms of income and cannot obtain them from employers, banks, or other payers can use the IRS Get Transcript online tool.
what to do if you can’t pay your taxes on time
April 18 is approaching – the deadline for filing tax returns and paying taxes. But not everyone can spend them on time. Fortunately, the US Internal Revenue Service (IRS) offers several payment options after that date. What to do, told Yahoo.
“The IRS has programs such as installments and deferrals,” said Nancy DeRusso, head of Goldman Sachs Ayco’s Personal Financial Management. “But if you know you can’t pay, it’s best to file a tax return and work with the IRS to get installments, or you’ll face huge fines.”
Request a repayment plan
If you are faced with an outstanding tax debt that you will not be able to pay shortly, do not panic.
According to the US Internal Revenue Service, you can apply for an online payment plan to extend the payment period and repay your debt at a convenient rate. But do not confuse with the delay in filing a tax return.
“Some people ask for a deferral of filing a tax return, thinking they are getting a deferral for paying taxes, but that’s a different thing,” DeRusso said.
To receive a tax deferral, you must file an online application (OPA) before the tax deadline, which may vary from April 18, depending on your state or circumstances.
As soon as you apply, you will immediately receive a notification whether your payment plan has been approved. Online payment plans can be short-term or long-term.
“Short-term repayment plans offer a payout period of 120 days through OPA. This option is available to taxpayers who have less than $ 100,000. Accrued fines and interest are apply until the balance is paying in full,” said Eric Bronnenkant, head of tax at Betterment.
Short-term payment plans are available for up to 180 days, but you must call the IRS at 800-829-1040 and make a formal application via Form 9465 to receive an installment agreement. The same rule applies if you need to request a renewal plan that exceeds 180 days.
“A taxpayer can also apply for an installment agreement if he has less than $ 50,000,” Bronnenkant said. – Application fees are usually charged but may be reduced for low-income taxpayers. Accrued fines and interest are applied until the balance is paid in full. “
The IRS offers several ways to make monthly payments, including direct payments from your bank account, automatic payroll deductions, EFTPS payments, and credit card payments over the phone or online.
You can also pay by check, money order, or cash from a retail partner. For those who pay by check, consider delays in the mail. The IRS handles all correspondence in the order in which it was receiving, as it has been facing uncertainty since April 2021.
Offer a compromise
According to Bronenkant, another way to repay their tax liabilities could be a compromise offer. This agreement between the IRS and the taxpayer on the settlement of tax liabilities is less than the amount accrued.
Compromise can take a long time. But if the IRS does not reject, return or revoke your offer within two years from the date of receipt of the postmark, the request will be accepted.
Reasons the IRS may accept your offer include “doubtful recovery,” meaning the IRS has determined that you don’t have enough income to pay off the debt in full. Your case may also be accept if the IRS finds that you can repay your balance, but this is causing severe financial difficulties.
“This option is not easy to apply for, and anyone who considers it must pass a preliminary assessment,”. Bronnenkant said. – Factors that are taking into account are solvency, income, expenses, and equity. Application fees are usually charge but may be reduce for low-income taxpayers.”
Do not pay by credit card.
Having tax liabilities can increase the burden on your finances, but do not pay them with a credit card, advises Rus Garofalo, founder of Brass Taxes.
As the Federal Reserve intends to increase the base interest rate six times this year, the credit card rate will increase.
According to Garofalo, you must first repay your debt to the state because interest rates on it are higher than the federal government. Depending on the year, your national debt can have an interest rate ranging from 3% to 5%, which is often much lower than state interest rates.
“As for the federal government’s debt, I like to tell people it’s a good credit card with a low-interest rate.