The IRS deadline to file your 2021 taxes approaching on April 18, 2022. Are you ready? Are you worried about not being able to pay your tax bill in full. Here is what you need to know:
File On Time
Yes, you should file on time, even if you are worried about not being able to pay. Why?
- If you owe taxes and do not file their return on time or request an extension, you may face a penalty for not filing on time. So, you must pay your tax bill regardless by April 18th to avoid interest and penalties.
- Remember, you have options if you cannot afford to pay your taxes. Click here for more information.
- An extension of time to file is not an extension of time to make a payment. Taxes owed are still due April 18, 2022.
Can’t Afford a Tax Professional?
Volunteer Income Tax Assistance (VITA) offers free tax preparation. According to VITA, eligibility for this option is available to “help people who generally make $54,000 or less, persons with disabilities, the elderly and limited English speaking taxpayers who need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals.” You can also check the IRS free file website for more options.
How Do I Get an Extension?
- First, you will need to complete Form 4868 through a tax professional, tax software, or using the IRS’ Free File on the IRS website.
- Next, you need to submit an electronic payment with Direct Pay, debit or credit card, or by the Electronic Federal Tax Payment System. Be sure to select Form 4868 or extension as the payment type.
Set up a Payment Plan
What happens if you cannot afford to pay your tax bill in full? You can apply for a repayment plan now. First, go to the IRS website and apply for a payment plan. Be sure to read through the instructions carefully and complete Form 9465.
What Happens If I’m Filing For Bankruptcy?
The trustee in your case will need your taxes. In fact, if you are filing under Chapter 13, you will need to submit your tax returns yearly throughout your bankruptcy until your case is discharged. Even in a Chapter 7, you will need to provide your most recent tax return. The trustee in your case may even require more than one year, so it is important to be current.
Tax Refunds in Bankruptcy
It is important to understand that the court will treat your tax refund as property of your estate. The amount that the trustee requires be sent back will vary depending on your state. Check with your attorney to go over the amount that your state requires. However, there are ways in which you and your attorney can petition the court to attempt to keep your refund. Discuss this with your attorney as soon as possible. Also, if you have filed for Chapter 13, you will need to send your tax returns to the trustee each year or send them to your attorney’s office until your case is completed.
Need More Information?
At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like to get to know you and we would like you to get to know us. We want you to be sure you are the right fit for us and that we are the perfect fit for you. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.