When you learn how to file back taxes online, you’ll see there are several methods of payment. The Internal Revenue Service (IRS) states that you should pay the tax due even if you cannot file on time. Even when you apply for an extension, you are obligated to pay your taxes by the April 15 deadline.
Back Taxes | What Taxpayers Need to Know for Online Payment
📷 IRS TAX PENALTY FORGIVENESS : How to Make Sure You Qualify When you owe back taxes to the Internal… https://t.co/IHU2xTeiFn
— NOAH DANIELS,EA (@PaNoah100) December 2, 2017
If you do have back taxes, you are most likely going to pay penalties. The fine for not paying your taxes by the April 15 deadline or the extension deadline is usually higher than the penalty for not paying on time. However, the IRS will penalize you for not paying and not filing.
Even if you can’t pay back taxes you owe, you should file your taxes every year, especially since not filing causes you to pay a separate penalty. The IRS charges interest on any money that you owe it, so even making a partial payment helps save you money since you won’t have to pay interest on the amount you are able to pay.
If you file late, the penalty can reach a maximum of 25 percent with a 5 percent increment for each month of no payment. If you do not file your taxes within 60 days of the pay date, whether it’s the April date or the October date if you filed an extension, the minimum fine is $205 or 100 percent of the payment due, whichever is lesser.
The penalty for not paying on time is one-half of 1 percent of the unpaid taxes per month. However, if you file an extension and pay at least 90 percent of what you owe, you may not get a penalty. But, you must pay the remaining amount due by the extended due date. If you owe both penalties, the IRS limits the penalty to 5 percent. A minimum charge of $135 is assessed or 100 percent of the amount you owe if you do not pay within 60 days of the maturity date.
Methods of Payment When You File Back Taxes Online
The IRS makes it easy for you to pay your taxes online. You could use IRS Direct Pay, which is a free and secure way to pay your tax problems. Schedule payments in advance and have the money come directly from your bank account. There’s no need to register to use this service.
You are also able to choose a payment processor and pay by debit or credit card online. IRS2Go is another method of paying online – download the app from Google Play, Amazon or the Apple App Store.
When you file your returns electronically, you also have the option of paying when you file via electronic funds withdrawal. Simply choose the date and the amount. As long as it is on the filing due date or before, the payment is on time.
Filing Back Taxes
You file past due returns in the same manner that you would file a return that is on time. If you need supporting evidence for income earned and deductions, file form 4506-T and the IRS will send you the information it has. If you are self-employed, you will not be able to get a copy of your income earned from the IRS. Download the proper tax forms for the year. For example, if you did not file 2015 taxes in 2016, you need to download the 2015 tax year forms to file. You may file by regular mail or use one of the tax help services to file your late taxes. The forms also give you information about submitting your returns online – you would file them at the same address you would have filed your taxes had they been on time.
Filing On Time
Save yourself some money by filing your returns on time, even if you cannot pay any or all of the amount you owe. The fee for filing late is higher than the fee for paying late. If for some reason, you cannot complete your taxes by the April deadline, simply file an extension and pay them as much as you can when you ask for the extension.
Check out this video for more back taxes options by Stephan H. Brewer:
The extension keeps you from having to pay the penalty for filing late, and since that is 5 percent every month, you’ll save quite a bit of money. Check the IRS site for making payments when you cannot pay your entire tax bill. Remember, even if you are only able to pay some, that is money that you won’t have to pay interest on.
Does the article answer your questions about paying back taxes? Share your thoughts in the comments section below!
Up Next: How To Fill Out Your IRS Tax Forms