To File or Not to File…On Time
Question:Should I go ahead and file my tax return even though I am unable to pay or should I wait until I can pay for my tax in full to pay for it? I guess I could file for an extension now and pay in October, right?
Answer: You should file your 2009 income tax return no later than April 15, 2010 unless you intend to file an extension. However, if you are going to owe the IRS you should pay the tax due by April 15, 2010 even if you plan on filing an extension. The extension simply grants you more time to prepare the return, but not more time to pay the tax due. If you wait to pay the taxes until you file your return, you will have to pay penalties and interest. If you are in the situation where no matter when you file your tax return you will not be able to afford to pay the tax, you should go ahead and file the return. This will at least save you the failure to file or late filing penalties that the IRS assesses for non-filed and late-filed tax returns. From this point you can begin to negotiate with the IRS about your tax liability and how you are going to pay that.