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This is the time of year in which it’s almost time to “pony up” those unpaid income taxes for last year. There could also be valid reasons in which you are not ready to file your tax returns – missing tax return information (still do not have your last W-2s, 1099-R or Schedule K- 1 s, etc.), the large amounts of funds that you need are not yet available, or your tax preparer has not met with you to review your tax returns). There are also other reasons. However, while the Tax Code does permit you to request a six-month extension of the time to file your tax returns, it does NOT allow for you to request or delay the “time to pay” your total prior year taxes after the statutory deadline.
Well, what other options are available to you?
a. Borrow the funds from your business, friends, or relatives
b. Use your credit card
c. Obtain a short-term loan from your bank or financial institution
d. Submit a request to the Internal Revenue Service to participate in an “Installment Agreement” [Form 9465 – Form 9465 (Rev. September 2020) (irs.gov) ]-Submit this completed form with your tax return.
To avoid having to pay late payment fees and penalties, you can also review the IRS “Safe Harbor Rules”
#1 –Actual 2021 Federal tax liability is within $1,000.00 of your total 2021 tax deposits for combined withheld taxes and estimated tax deposits, or;
#2 – You have already deposited a total of 110% of your 2020 tax liability or;
#3 –You pay 90% of your 2021 Federal tax liability on or before April 18th.