This tax status may bring you woe: “I owe! Oh no! I haven’t got any dough! So…”
This scary situation may make you want to dodge the IRS, but don’t do it.
Resist the temptation to skip filing, warns Money Talks News savings expert Stacy Johnson. The penalty for not filing is 10 times worse than it is for paying late. And the April 15 filing deadline is fast approaching.
Watch the video below for Stacy’s tips and then keep reading for more advice on what to do if you can’t pay the IRS a dime on time.
Don’t fail to file
When it comes to income taxes, most people are rewarded for filing because they get money back.
As of Feb. 20, the IRS said in its latest weekly update on the 2015 filing season, 49.6 million tax returns were filed; nearly 40 million were getting refunds averaging $3,120 each.
If you owe and can’t pay, file anyway! If you file something and don’t pay, your penalty will be 0.5 percent per month on what you owe, the IRS says. But if you don’t file anything at all, it’s 5 percent per month, or 10 times more, up to 25 percent of your total tax bill.
For example, if you owe $1,000, file, but don’t pay, Uncle Sam will assess you $5 a month until you send in what you owe. But if you don’t file, the penalty will be $50 a month.