Even though this is our HR Blog at CBS we understand how your HR
professionals, in house and/or outsourced, must be active in and aware of
all the pieces it takes to run a business.
For your HR department to
truly support you as an employer they must understand all the facets the
employer must take into consideration while running their business. So as
part of our HR blog this week Complete
Business Solutions wants to remind taxpayers that quick and easy solutions
are available through the IRS if they can’t file their returns or pay their
taxes on time, and they can even request relief online.
This CBS blog contains more
information about the Fresh Start
Initiative from the IRS, but it also contains information on how you can
easily file for an extension. Links
within this blog will take you to the multiple IRS pages where you can obtain
more information or the forms or website you need to file an extension.
The IRS says don’t panic. Tax-filing extensions are available to taxpayers who
need more time to finish their returns. Remember, this is an extension of time
to file; not an extension of time to pay. However, taxpayers who are having
trouble paying what they owe usually qualify for payment plans and other
relief. Last month, for example, the IRS, as part of its Fresh
Start initiative announced penalty relief for unemployed taxpayers and
self-employed individuals whose income has dropped.
Either way, taxpayers will avoid stiff penalties if they file either a regular
income tax return or a request for a tax-filing extension by this year’s April
17 deadline. Taxpayers should file, even if they can’t pay the full amount due.
Here are further details on the options available.
More Time to File
People who haven’t finished filling out their return can get an automatic
six-month extension. The fastest and easiest way to get the extra time is
through the Free
File link on IRS.gov . In a matter of minutes, anyone, regardless of
income, can use this free service to electronically request an automatic
tax-filing extension on Form
4868.
Filing this form gives taxpayers until Oct. 15 to file a return. To get the
extension, taxpayers must estimate their tax liability on this form and should
also pay any amount due.
By properly filing this form, a taxpayer will avoid the late-filing penalty,
normally five percent per month based on the unpaid balance, which applies to
returns filed after the deadline. In addition, any payment made with an
extension request will reduce or eliminate interest and late-payment penalties
that apply to payments made after April 17. The current
interest rate three percent per year, compounded daily, and the
late-payment penalty is normally 0.5 percent per month.
Besides Free File, taxpayers can choose to request an extension through a
paid tax preparer, using tax-preparation software or by filing a paper Form
4868, available on IRS.gov. Of the 10.5 million extension forms received by the
IRS last year, about 4 million were filed electronically.
Some taxpayers get more time to file without having to ask for it. These
include:
• Taxpayers
abroad. U.S. citizens and resident aliens who live and work abroad, as well
as members of the military on duty outside the U.S., have until June 15 to
file. Tax payments are still due April 17.
• Members of the military and others serving in Iraq, Afghanistan or other
combat
zone localities. Typically, taxpayers can wait until at least 180 days
after they leave the combat zone to file returns and pay any taxes due. For
details, see Extensions of Deadlines in Publication
3 , Armed Forces Tax Guide.
• People affected by certain tornadoes, severe storms, floods and other recent
natural disasters. Currently, parts of Indiana, Kentucky, Tennessee and
West Virginia are covered by federal disaster declarations, and affected
individuals and businesses in these areas have until May 31 to file and pay.
Easy Ways to E-Pay
Taxpayers with a balance due IRS now have several quick and easy ways to
electronically pay what they owe. They include:
• Electronic Federal Tax Payment System (EFTPS). This free service gives
taxpayers a safe and convenient way to pay individual and business taxes by
phone or online. To enroll or for more information, call 800-316-6541 or visit www.eftps.gov.
• Electronic
funds withdrawal. E-file and e-pay in a single step.
• Credit
or debit card. Both paper and electronic filers can pay their taxes by
phone or online through any of several authorized credit and debit card
processors. Though the IRS does not charge a fee for this service, the card
processors do. For taxpayers who itemize their deductions, these convenience
fees can be claimed on Schedule
A Line 23.
Taxpayers who choose to pay by check or money order should make the payment
out to the “United States Treasury.” Write “2011 Form 1040,” name, address,
daytime phone number and Social Security number on the front of the check or
money order. To help insure that the payment is credited promptly, also enclose
a Form
1040-V payment voucher.
More Time to Pay
Taxpayers who have finished their returns should file by the regular April 17
deadline, even if they can’t pay the full amount due. In many cases, those
struggling with unpaid taxes qualify for one of several relief programs,
including those recently expanded under the IRS "Fresh Start"
initiative. These include the following:
• Most people can set up a payment
agreement with the IRS on line in a matter of minutes. Those who owe
$50,000 or less in combined tax, penalties and interest can use the Online
Payment Agreement to set up a monthly payment agreement for up to six years.
Taxpayers can choose this option even if they have not yet received a bill or
notice from the IRS. Alternatively, taxpayers can request a payment agreement
by filing Form
9465-FS. This form can be downloaded from IRS.gov and mailed along with a
tax return, bill or notice.
• Most unemployed filers and self-employed individuals whose business
income dropped substantially can apply for a six-month extension of time to
pay. Eligible taxpayers will not be charged a late-payment penalty if they pay
any tax, penalty and interest due by Oct. 15, 2012. Taxpayers qualify if they
were unemployed for any 30-day period between Jan. 1, 2011 and April 17, 2012.
Self-employed people qualify if their business income declined 25 percent or
more in 2011, due to the economy. Income limits and other special rules apply.
Apply using Form
1127-A.
• Some struggling taxpayers may qualify for an
offer-in-compromise. This is an agreement between a taxpayer and the IRS
that settles the taxpayer’s tax liabilities for less than the full amount owed.
Generally, an offer will not be accepted if the IRS believes the liability can
be paid in full as a lump sum or through a payment agreement. The IRS looks at
the taxpayer’s income and assets to make a determination regarding the
taxpayer’s ability to pay.
Details on all filing and payment options are on IRS.gov.
Complete Business Solutions can
provide accounting and bookkeeping support that will give you
a clear financial picture of your future.
Contactus today and begin to work with professionals that can offer you a level of
support you never thought you could afford!
We developed our packages to be an affordable alternative to small
business owners struggling to take care of their bookkeeping on their own, or for those who can’t afford to hire a bookkeeper with advanced accounting and bookkeeping
skills. Or perhaps for those who have in
house bookkeeping, we can provide a higher
level of bookkeeping services, financial reporting, and consulting at a cost less than the cost
of your in house bookkeeper.
