Yes, You Should File — Even if You Can’t Pay!
On Monday, April 18, our 2021 IRS tax returns are due. Yikes!
If you have a back tax issue right now, you’re probably already dreading it. You may have even pulled out your fat stack of financial paperwork and spread it over your kitchen table. I know I have. All of those numbers and forms can be incredibly overwhelming. Faced with it, you might catch yourself wondering, “If I’m already in trouble with the IRS, should I even go through the hassle of filing?”
It’s tempting to shove all of those forms back in the closet and avoid the issue until next year, hoping it all goes away. But here’s the difficult truth: That is the very last thing you should do.
As a taxpayer, you must always file on time, even if you cannot fully pay the tax owed.
Why? Because the “Failure-to-File” penalty is the largest tax penalty the IRS dishes out. If you fail to file on time, the agency can penalize you by increasing what you owe by up to 25%. In other words, if you owe $10,000 in taxes this year, the IRS could bump that up to $12,500 simply because you failed to file. That penalty — not Tax Day — is the real monster in this story.
If you’re stressed about the filing process or have procrastinated on preparing for April 18, you can request a filing extension with the IRS that will give you until Oct. 15 to file. That’s six extra months of cushion! However, it’s worth noting that an extension only provides you more time to file, not to pay. If you owe federal tax for 2021, it will still be due on the original due date in April.
I understand that probably isn’t the message you were hoping for when you started to read this newsletter. But now that I’ve told you the bad news, I can share the good news: When dealing with an IRS back tax issue, there are always options available for taxpayers who need relief while faced with a personal or financial hardship.
Here at Landmark Tax Group, my team and I have resolved over $400 million in back taxes for thousands of taxpayers across the country. We can help no matter how tough your situation is. A few years ago, I helped one client — I’ll call her Gina — tackle $103,756 in back taxes. My team and I negotiated a payment plan for her with the IRS. In the end, the agency agreed to accept payments of $100 per month for a total of $12,000. The IRS forgave the other $91,756 of her tax debt. That’s an 88% savings!
As I told you before, a great way to tackle your back taxes is with the IRS’ Fresh Start Program, which we can help you utilize. To learn how to get a free Fresh Start with the IRS before Tax Day, visit LandmarkTaxGroup.com/FreshStart. It may not make the pile of paperwork on your kitchen table or tax deadline swamp monster go away, but it will give you an opportunity to clear your name with the IRS.
Next year, Tax Day will be as easy for you as it is for me and my family today.
See you soon at LandmarkTaxGroup.com/FreshStart.