Bonus Tax Facts: FILE—Even If You Can’t Pay

50 Million Have Yet To File

As of today, the IRS reports about 50 million taxpayers have yet to file their tax returns. With the April tax filing due date just a few days away, it is important to both file and pay any taxes owed by the deadline.

Some taxpayers avoid filing because they know a balance will be due and they simply do not have the money to pay. In that situation, you have options. Not filing a return is NOT one of them.

Taxpayers who do not file and pay timely will see their tax debt grow. In fact, penalties and interest can cause a taxpayer’s debt to grow by more than thirty percent in just a few months.

If you owe tax but can’t immediately pay your tax bill, here are some tips:

File your tax return or request an extension of time to file by the April deadline.
Taxpayers who owe tax and do not file their return on time or request an extension may face a failure-to-file penalty for not filing on time.
Pay as much as possible by the April due date.
Whether you are filing a return or requesting an extension, you must pay your bill in full by the April filing deadline. Those who do not pay their taxes on time will face a failure-to-pay penalty.

Remember that an extension of time to file is not an extension of time to pay.

Set up a payment plan as soon as possible.
If you owe but cannot pay in full by the deadline, don’t wait for a tax bill to request a payment plan. If you prepare your taxes yourself, you can apply for a payment plan on IRS.gov or by submitting Form 9465, Installment Agreement Request.

Get An Extension

The IRS offers extra time to file, automatically, to all taxpayers requesting it. A filing extension allows taxpayers until Oct. 15 to gather, prepare, and file their taxes with the IRS. However, it does not extend the time to pay any tax due.

Taxpayers can request an extension through a paid preparer, tax preparation software, or by mailing a paper Form 4868. If mailing a Form 4868, the form must be mailed to the IRS with a postmark on or before the April tax-filing deadline.

Automatic Tax Filing Extensions

Anyone can request an automatic tax-filing extension, but some people get extra time without asking, according to the Internal Revenue Service.

Victims Of Certain Federally Declared Disasters

Some disaster victims may have extra time to file their tax returns and pay any taxes due.

Taxpayers affected by the Nov. 30, 2018, earthquake in parts of Alaska have until April 30, 2019, to file and pay.
Those affected by the March 3, 2019, tornadoes and severe storms in parts of Alabama have until July 31, 2019, to file and pay.
Residents of California impacted by wildfires on Nov. 8, 2018, have until April 30, 2019, to file and pay.
Residents in parts of Nebraska affected by the March 9, 2019, winter storms and flooding have until July 31, 2019, to file and pay.
Residents in parts of Iowa affected by the March 12, 2019, severe storms and flooding have until July 31, 2019, to file and pay.

This relief applies to tax returns and tax payments currently due within the relief periods.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment, or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

This relief also includes additional time for making a 2018 IRA contribution and making estimated tax payments. For details on other available relief, visit the Around the Nation page on IRS.gov.

Combat Zone Taxpayers

Military service members and eligible support personnel serving in a combat zone have at least 180 days after they leave the combat zone to file their tax returns and pay any taxes due. This includes those serving in Iraq, Afghanistan, and other combat zones. A complete list of designated combat zone localities can be found in Publication 3, Armed Forces’ Tax Guide.

Combat zone extensions also give affected taxpayers more time for a variety of other tax-related actions, including contributing to an IRA. Various circumstances affect the exact length of the extension available to any given taxpayer. Details, including examples illustrating how these extensions are calculated, can be found in the Extensions of Deadlines section in Publication 3.

Taxpayers Outside The United States

U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico have until June 17, 2019, to file their 2018 tax returns and pay any taxes due. They actually have two extra days because the normal June 15 extended deadline falls on Saturday this year.

The special June 17 deadline also applies to members of the military on duty outside the U.S. and Puerto Rico who do not qualify for the longer combat zone extension. Affected taxpayers should attach a statement to the tax return explaining which of these situations apply.

Though taxpayers abroad get more time to pay, interest — currently at the rate of six percent per year, compounded daily — applies to any payment received after the April deadline. For more information about the special tax rules for U.S. taxpayers abroad, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

Bottom Line

Unless you qualify for one of the exceptions listed above, you have this weekend and Monday to get your taxes filed or to file an extension.