For the 2013 tax season, 12 million Americans filed form 4868 to request a six-month extension on their taxes. Verdeja, De Armas & Trujillo, LLC is a Miami accounting firm that also specializes in tax consulting. We have provided some steps in order for you to complete your taxes and avoid any expensive penalties.
If you filed the extension on time (postmarked by 11:59 p.m. on 4/15 in your time zone), you may have eliminated the 5 percent of any unpaid penalty per month up to 25% of the total. However, the extension did not eliminate your responsibility to pay taxes. It is necessary for you to make an estimated tax payment as soon as possible – the Miami accounting firm V&DA recommend at least 90 percent of what you owe.
If you failed to mail your extension on time, the IRS will contact you. It’s important to note that the IRS does expect payment regardless of tax documentation or preparation.
Even if you think you may not be able to pay your taxes, it’s still not a reason to not file at all. The IRS offers payment plans including a short-term extension to pay and long-term installment plans. It is important to understand that if the IRS owes you money, they won’t pay until your taxes are complete and until all returns are filed, the three-year statute of limitations period for the commencement of the IRS audit never begins.
The IRS advises that you pay what you can in order to reduce interest and fees. To enable you in your pursuit they have established flexible payment options. It’s possible for taxpayers to set up a monthly repayment option by completing Form 9465 (Installment Agreement Request) and submit it with your return. The benefit of this form is that you can determine your own monthly repayment amount and terms. Approval is automatic for amounts owed of less than $10,000 and repayment periods of 36 months or less. For debts less than $50,000 in combined taxes, fees, interest and penalties, the process can be completed online at IRS.gov. For debts greater than $50,000, additional forms and repayment documentation must be completed and sent to the IRS. Once this form is approved, the IRS will charge a $120 set up fee or $52 if you agree to monthly EFT from your checking account. You will continue to be charged interest at a reduced rate of 0.5% monthly.
However you decide to work with the IRS, make sure to file the proper forms and paperwork to indicate that you are making an effort to pay your taxes. If you aren’t sure where your business stands, then it may be time to seek the advice from a Miami accounting firm.
At Verdeja, De Armas & Trujillo, LLC, our tax department provides tax consulting and compliance services to individuals, corporations, S corporations, partnerships, limited liability companies, trusts and estates, and not-for-profit entities. Our services include: bank and project financing, mergers and acquisitions, offshore companies, state and local tax consulting, sales and use tax and real and personal property tax. We assist our clients by navigating them through the returns you are required to file. Contact us today for a consultation!