If you are having trouble paying your taxes by the deadline date of April 15, 2010, then you’re not alone.
File your taxes even if you can’t pay them
The reason is because the penalty for not filing your taxes is greater than not paying them. Funny but true: there is a possibility of imprisonment for not filing but not for being unable to pay your taxes on time – however, there may be some penalties if the IRS can prove that you intentionally did not pay your taxes.
If you file your taxes and don’t pay what you owe in full, then the IRS will send you a letter asking for what’s due including the included interest in about 45 days, helping you buy some time to come up with the money to pay for your taxes.
File for a tax extension
You can delay your tax filing deadline by six months, until October 15 by using Form 4868 electronically or by mail. This will allow you to file your taxes late but will not delay your deadline for paying your taxes – so if you are still late on your tax payments then you must still consider the interest and late penalties due. The good thing is that if you file for a tax extension then you will be charged 0.5% late fees a month, up to 25% of the balance, plus interest, instead of 5% late fees a month if you did not file for a tax extension.
Paying Some of your Taxes is Better Than Nothing
If you are unable to pay your taxes in full when you file your return, pay whatever you can to decrease late fees and interest.
Communication is important: If you are struggling and need help, call the IRS at 800-829-1040 to discuss payment options and work out a plan. In some cases, you may be able to work out a way to settle for less of the tax amount that you owe if you can prove that it will be nearly impossible to repay now or in the future.