Taxing Matters April 11, 2007

Wednesday, April 11, 2007

By Dave Cohen

April 15th is the nominal due date for filing an Individual Income Tax Return on time. When it falls on a Saturday, Sunday or holiday the due date for filing is the next business day. This year the 15th is on a Sunday, and Monday the 16th is a legal holiday in Washington D.C. The result is that April 17th is the date that Federal tax returns are due to be filed this year.

If you can’t file your return by the 17th you may request an automatic extension of time to file the return. The extension of time to file will extend the due date to October 15th. The application (form 4868) should indicate whether you think you will owe additional tax or not. The extension is granted automatically, if the form is filed on time.

Additional tax that you think you may owe does not have to be submitted. However only the filing due date is extended, not the date the additional tax is due so payments made after April 17th will be subject to interest and penalty charges. Paying any tax you think will be due on your return, to accompany the extension application, would be desirable but not required.

If your return is not filed on time and additional tax is due, the tax owed is subject to a combined late filing and late payment penalty of 5 percent per month for the first 5 months the tax return is late, and continues at one-half percent monthly on the unpaid tax in addition to an interest charge.

Another thing to remember is that April 17th is the last day to file an original or amended (corrected) return for 2003 and be eligible to receive any refund due to you.

What if I can’t pay the entire tax due?
If you can’t pay the entire additional tax due on your return you have options. One option is to arrange a payment plan with the IRS. This may be requested on form 9465 attached to your return, or it may be arranged on the Internet through the IRS Web site at irs.gov, or by phone (1-800-829-1040).

Another option is to request a 30 to 90 day extension to pay the entire tax. To qualify for a payment arrangement all past tax returns that were required to be filed, must have been filed. A monthly payment arrangement includes a set-up fee that is added to the balance of tax due. Interest and penalty continue to be charged on any unpaid tax.
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Taxing Matters April 11, 2007 | Planet JH News Article: Business

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