Key IRS Deadline Only 1 Week Away: Here’s Who’s Impacted

Some taxpayers only have until October 15 to file their taxes, according to the Internal Revenue Service (IRS).
For those who are unable to make their tax payment, the IRS allows you to apply for an installment payment plan. This will give you some flexibility in making the payments over time instead of all at once. While interest and late payment penalties still apply, you can likely avoid the failure to pay penalty by setting up an installment plan.
“If you had to submit an extension to file your taxes on October 15, the most important objective in the coming days is making sure you complete the process, even if it leads to you having a big bill owed to the IRS,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “Not only will you accrue more penalty costs and interest, but you more than likely won’t have a realistic idea of what you owe and how to pay it.”
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Late penalties mean you’ll gain 0.5 percent per month up to 25 percent on your tax payment alongside interest. The failure to pay penalty is a lot higher, however, costing taxpayers 5 percent of their unpaid taxes per month up to 25 percent.
The original deadline for filing federal taxes was April 15, but many Americans qualified for a six-month extension after filling out Form 4868.
Generally, taxpayers can choose between payment options online, and those who owe less than $50,000 can generally get approved for one automatically.
The options available include the short-term payment plan, which allows you 180 days to pay what you owe, as long as you owe $100,000 or less. The long-term payment plan is also an option you have less than $50,000 to pay, and you’ll have 72 months to make the full payment.
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“Paying taxes isn’t fun, but it can be substantially worst if you keep delaying the inevitable,” Beene said.
Jeb Jarrell, the owner of Plentiful Wealth, an RIA firm specializing in tax planning and investment management for high-net-worth Individuals, said business owners and investors often delay their returns due to complicated situations.
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“If you filed an extension and haven’t filed your taxes yet, now is the time,” Jarrell told Newsweek. “CPAs have a second busy season in the month ahead of the October deadline, so you need to reach out and coordinate to make sure they have both the time to complete your return and all the information necessary.”
In recent years, the IRS unveiled a series of options for taxpayers with its Fresh Start program.
Fresh Start allows you to clear your taxes owed via installment payment plans, an offer-in-compromise or even a penalty relief for some taxpayers, Jarrell said.
“The biggest opportunity in the Fresh Start Program is for taxpayers to clear a lien from the IRS,” Jarrell said. “Clearing the outstanding lien should help the taxpayer’s credit score and ability to access lending like a mortgage or an auto loan.”
Self-employed taxpayers also still have time to make a tax-deductible retirement contribution through IRAs and 401ks, which lowers their taxable income.
Michael Ryan, a finance expert and the founder of michaelryanmoney.com, said Fresh Start helps many small business owners and seniors who became surprised by crypto taxes.
“Don’t wait for everything to be perfect,” Ryan told Newsweek. “If you’re missing some paperwork, tell the IRS about it and file anyway. You can fix mistakes later.”
Ryan said the worst thing taxpayers can do is ignore their taxes.
“October 15 is your last chance to do the right thing with your taxes,” he said. “I’ve helped lots of people with taxes, and no one ever regretted filing on time. But plenty of people wished they hadn’t waited.”