October 15th 2010 is quickly approaching. This is an important date for the millions of taxpayers that filed for a 2009 tax filing extension. This deadline is important to not miss because after this date taxpayers can face some serious tax penalties and interest for unfiled or unpaid taxes. Below are some important factors to keep in mind about the October 15th deadline.
If you owe taxes and didn’t pay by April 15th
Filing an extension is not an extension to pay, only an extension to file. If you didn’t pay taxes owed for 2009 and filed for an extension, it is important that you pay your taxes or setup a payment plan prior to October 15th. When you file your taxes and the IRS realizes you owed taxes for 2009 and didn’t pay in April, they will assess you with tax penalties. The good thing about these penalties is that you will only be charged the failure to pay penalty. The failure to pay penalty is only .5% a month, which is only a fraction of the 5% (failure to file) a month the IRS would have charged if you didn’t file for an extension.
If you don’t file by October 15th and owe taxes
If you do not file your taxes by October 15th, and you owe taxesyour penalties can increase. After October 15th your penalty will go from .5% a month to 5% a month for each month that your taxes remain unfiled.
If you can’t pay taxes owed by October 15th
Even though you were suppose to pay your taxes by April 15th and didn’t, October 15th is an important date because once your taxes are filed and the IRS realizes that you owe them money you are on their radar. Not being able to pay taxes is not a serious offense to the IRS. The IRS tries to make it easy for taxpayers that cannot pay by allowing different forms of IRS payment plans. The worst thing you can do is not address this issue and work with the IRS to resolve it because the IRS will then begin their collection process and you can be at risk of receiving a tax lien or levy.
With October 15th coming up very soon, it is important you start preparing your tax filing if you haven’t already. This is one deadline that cannot be missed because there are no more extensions available after this date.