The tax season deadline is almost near, with less than two weeks to submit tax returns. After the April 15 deadline, the IRS will charge each taxpayer 0.5 percent of their unpaid taxes every month as a late-filing penalty. The penalty increases and can reach a maximum of 25 percent of the unpaid taxes in cases where taxpayers cannot provide a reasonable cause for the delay or where a levy is imposed due to non-payment of taxes.
Taxpayers with financial limitations can use the IRS’ Volunteer Income Tax Assistance (VITA) program to have their tax return prepared. The elderly can use the Tax Counseling for the Elderly (TCE) program to assist them in preparing their returns as well. The IRS recommends that taxpayers who cannot afford to pay their taxes should still file their tax return by April 15th and send in a payment for their tax liability, even if it isn’t the full amount. Online resources can be used to file returns comfortably.
Taxpayers who receive an extension will still be required to pay interest on their tax debt. IRS spokesperson, Jennifer Jenkins, said that “more people may be filing for an extension this year than last year” because the American Taxpayer Relief Act was enacted in January 2012, which may lead many taxpayers to delay their tax payment. The IRS has extended late-payment penalty relief to taxpayers who attach their returns to any of the forms that were unable to be filed until after January 2012.
According to the national projection data, the federal government will receive more than 143 million income tax returns for 2012. It is estimated that the IRS will receive more than 11.3 million extension requests.
“A late payment penalty is being waived for individuals and organizations who owe money when they file for an extension, provided they claim any of the credits for which tax forms weren’t ready on Jan. 30,” Jenkins said.
It is in the best interests of taxpayers to file tax returns on time to avoid any penalties and interest.