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 request. 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 15 to be granted a filing extension until October 15.
“However, an extension of time to file a tax return still does not constitute an extension of time to pay any tax liability. Penalties and interest accrue from April 15 if the tax liability has not been paid,” said John Hewitt, CEO of Liberty Tax Service.
INSTALLMENT PLANS FOR THOSE WHO OWE
What can someone do who owes the IRS money but can’t pay the full amount by April 15th? 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.
Taxpayers can charge their taxes owed to a MasterCard, VISA, Discover, American Express Card or a debit card. They can also pay on the internet by going to:
http://www.PAY1040.com or call 1-888-PAY-1040
http://www.officialpayments.com or call 1-888-UPAY-TAX
http://www.payUSAtax.com or call1-888-9-
A convenience fee applies when making credit card payments.
IRA DEADLINE IS ALSO APRIL 15
Taxpayers still have until April 15 to open a traditional Individual Retirement Arrangement (IRA) that may help them lower their tax liability for this year. Liberty Tax Service reminds you that for taxpayers covered by a pension plan at work, the modified adjusted gross income limit for deducting traditional IRA contributions has increased. A couple filing married filing jointly whose combined income is between $89,000 and $109,000 can take a partial deduction this year. Single taxpayers (including head of household filers) making between $55,000 and $65,000 can take a partial deduction.
# # #
Liberty Tax Service is the fastest growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 7,000,000 individual income tax returns. With 41 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service (NYSE:JTX).
Liberty Tax Service provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax. Each office offers customers audit assistance, a money back guarantee, and free tax return checking. The Liberty Tax Service franchise opportunity is #9 on the fastest growing franchises list of the 2010 Entrepreneur “Franchise 500.”