The IRS says that congress' late action on the alternative minimum tax means they won't be able to start processing five AMT-related forms until February, delaying potential refunds for those people until that month, Thursday, Dec. 27, 2007. (AP / CBS)
The countdown is on to one of life’s ultimate deadlines, the dreaded tax filing deadline. This year, it’s next Monday, April 18th. Taxpayers will have the luxury of time, with a few extra days to file this year. The filing deadline will be Monday because the holiday, Emancipation Day which is Friday, April 15th. This holiday is observed in the District of Columbia, so federal workers will be off that day.
Last-minute taxpayers may find that fewer post offices are open until midnight for drop-off service. Liberty Tax Service will extend hours during the final days of the tax filing season so taxpayers can e-file their tax return or extension around the clock up to the midnight deadline. As taxpayers face the Federal tax filing deadline, those who owe taxes have some choices.
IT’S TIME TO FILE TAXES OR AN EXTENSION REQUEST:
The IRS will grant an automatic six-month filing extension to taxpayers who file or e-file a timely extension application. Taxpayers do not need to provide a reason for their request. Individual taxpayers need to file or e-file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by April 18th to be granted a filing extension until October 17, since October 15th falls on a Saturday this year.
Taxpayers who owe can elect to have funds withdrawn electronically using a credit or debit card if they e-file their return. Or they can enroll in the U.S. Treasury’s Electronic Federal Tax Payment System that enables electronic fees withdrawals with no additional fees.
“An extension of time to file a tax return still does not constitute an extension of time to pay any tax liability,” said John Hewitt, CEO of Liberty Tax Service. “Penalties and interest accrue from April 18 if the tax liability has not been paid.”
INSTALLMENT PLANS FOR THOSE WHO OWE:
What can someone do who owes the IRS money but can’t pay the full amount by April 18? Taking out a bank loan may be the least costly option. Another option is to ask the IRS for permission to make monthly installment payments. If you are not currently on an IRS installment plan, complete Form 9465, Installment Agreement Request. This form can be e-filed with other tax forms or it can be attached to a return and mailed. To limit penalty and interest charges, the taxpayer should pay as much of the tax due as possible when sending in the return.
Taxpayers who have already mailed or electronically filed their returns can mail Form 9465 to the appropriate IRS Service Center. The IRS usually approves or denies installment requests within 30 days of receipt.
The IRS will approve or deny the request by sending out a written response. If the IRS approves the request, they will send you a notice detailing the terms of your agreement and requesting a fee of $105 ($52 if you make your payments by electronic funds withdrawal). However, you may qualify to pay a reduced fee of $43 if your income is below a certain level. These payments must be made on time, and the taxpayer must agree to meet all future tax liabilities. One available option to ensure timely payments is to have the funds directly debited from a bank account. Taxpayers may request this by completing line 11 of the Form 9465.