Would IRS charge me interest and penalties if I file my Tax Extention?
I am single and I did calculate the tax return online with my w-2, it says You owe IRS 2700$ and 600$ for state tax. I do not have money to owe IRS, so I am concern about my interest and penalties, if I file tax extention. Could any body help me what should I do?
Originally posted 2010-01-21 17:07:13. Republished by Blog Post Promoter
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An extension only extends the amount of time you have to *file* your return; it does not extend the amount of time you have to *pay* them. If you do not pay them on time, you will incur interest and probably penalties.
However it surprises me that, with them taking money out of your wages, you have not already paid a large part of your taxes. Did you claim exemptions on the W-2 that you weren’t really eligible for?
The extension is only an extension of time to file the tax return, not to pay the tax. The tax must be paid by April 15th or penalties and interest for late payment will apply.
File your return ASAP and pay as much as you can by April 15th. The IRS (and your State’s tax department) will set up payment plans for you to clear the remaining debt. There are fees for the payment plan and penalties and interest will continue to accrue until the balance is paid in full.
The penalty for late payment is .5% per month, plus interest. The interest rate can change quarterly. It is currently 7% APR. This results in an effective combined rate if 13% APR, which is better than most credit card rates, so don’t be excessively concerned about the penalties and interest.
Yes, interest and penalties accrue if you owe despite filing an extension.
An extension is only to file late, not to pay late – so yes, if you don’t pay all you owe by 4/15, you’ll be charged late payment penalties and interest. Filing for an extension doesn’t change that.