INDIANAPOLIS—Many taxpayers file their taxes late because they can’t afford to pay the state or federal government, but the Internal Revenue Service says that’s a huge mistake.
In this week’s Tax Tip Tuesday, WRTV Investigates Kara Kenney explains how you can avoid late penalties.
The IRS points out you have all kinds of options to pay:
- Pay from bank account – Direct Pay [irs.gov]
- Pay by Debit card, credit card or digital wallet - Card/Digital Wallet [irs.gov]
- Sign in to your account to make an Individual tax payment and see payment history - Account [irs.gov]
- Make a tax deposit payment or schedule and estimate tax payment with Electronic Federal Tax Payment Systems (EFTPS) - EFTPS [irs.gov]
- Same-Day Wire [irs.gov] — Bank fees may apply
- Check or Money Order [irs.gov] — Through U.S. mail
- Cash [irs.gov] — Through a retail partner and other methods
- Electronic Funds Withdrawal [irs.gov] — During e-filing
Stacy Engle, an IRS spokesperson based in Indianapolis, says if you don’t file because you can’t pay, you an be hit with penalties for failure to file and failure to pay.
"Paying on time will open your doors to options for the payments, so if you can't pay, maybe you can qualify for a payment plan, maybe you can qualify for what some people think of as a settlement or other options for people that literally can't pay anything,” said Engle. “At least file the tax return. That gives the IRS the correct information and to be able to help you. If you don't file we don't know what's going on or why you haven't filed or if you even owe.”
- The Failure to Pay Penalty is 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid. The penalty won’t exceed 25% of your unpaid taxes.
- The Failure to File Penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The penalty won't exceed 25% of your unpaid taxes.
You can create an account on www.irs.gov, which will allow you to view how much you owe and how to schedule a payment.
