Last-Minute Taxes
CBS Financial Adviser Ray Martin offers advice on The Saturday Early Show for taxpayers who have procrastinated or who haven't even started doing their 1999 taxes.
Monday, April 17, is the deadline for filing 1999 tax returns. If you're behind in filling out those IRS forms or haven't even started yet, you could be playing a very costly game.
Many people are so put off by taxes that they procrastinate or fail to file their returns at all. The IRS estimates that 1.6 million taxpayers didn't file their 1996 returns. Unfiled or late returns result in millions of dollars of unnecessary interest and penalties.
If you don't file at all, the IRS charges 5 percent a month on an unpaid tax bill. If you file late, the IRS can slap on a late-filing fee as high as 25 percent of the tax owed.
No Money to Pay?
If you've put off doing your tax return because you don't think you'll have enough money to pay the IRS, complete and file your return on time. The IRS offers several payment options:
Monthly Installment Plan
The IRS will rubber stamp any installment plan request for a bill up to $15,000 but you must:
- Plan to pay the tax bill within three years.
- Have a clean IRS record for the past five years. (That means never having failed to file or pay; never having had an installment agreement before.)
- Be willing to submit financial statements so the IRS can evaluate your true ability to pay.
- Comply with tax laws and stay current with your tax bills including paying future bills on time.
- Use Form 9465: Installment Agreement Request or a written request with your return.
Credit Card Payment
The IRS offers this service through Official Payments Corporation.
- Call 800-2PAY-TAX.
- Or visit its Web site at www.officialpayments.com.
Tax advisers also suggest writing a check for what you can pay and sending it in with your return, even if it is pennies on the dollar. This is still better than not paying or filing at all.
Missing Paperwork?
If you're missing tax forms and have access to a computer, you can download forms from the IRS Web site at www.irs.gov.
If you don't have a computer, call the IRS at 800-TAX-FORM. Or go to your local library, post office or bank but don't count on finding many forms left at this late date.
If you're missing financial paperwork, a phone call or two might get you the information you need.
- Call your bank or brokerage to find out interest, dividends or other income.
- Call your mortgage lender for total interest payments.
- Call your bank for copies of cancelled checks.
- Call your employer for a copy of your W-2.
Tax Software Programs
Prepare Taxes Online
Prepare your return for free at the following sites; some charge a filing fee:
- www.turbotax.com. (Filing fee charged.)
- www.taxcut.com. (Filing fee charged.)
- www.hdvest.com.
- www.currenttax.com.
Deadline Threatens To Overtake You?
If there's no way you can finish and send your tax return by midnight on April 17, you can still save money by asking for an extension. The IRS will almost always give you an extension to file an individual return.
Use Form 4868: Applicaton of Automatic Extension of Time to File. You must estimate your 1999 tax bill and send a check for that amount. This is not an extension of time to pay. All late payment penalties will apply.
If you find you cannot pay the full amount, you can still get the extension, but you'll owe interest on the unpaid amount. The extension due date is Aug. 15.