Many taxpayers are not quite ready to file their taxes when the tax filing deadline arrives. In fact, there are many reasons why a taxpayer would need more time to ensure a comprehensive and accurate income tax return filing. For instance, an employer may have neglected to send a W-2 or 1099 or may need to make corrections to the document. In other cases, a taxpayer may simply need more time to seek the professional guidance of a California tax lawyer if you are concerned about unfiled tax returns.  

However, filing for an extension of time to file is subject to certain limitations and aspects a taxpayer should be aware of prior to filing for an extension. A Sacramento tax attorney of the NewPoint Law Group can explain what a taxpayer who has filed for an extension must do to maintain his, her, or the business’s compliance. To schedule a confidential consultation at our one of our convenient law offices in Folsom or Roseville call 1-800-358-0305 today or contact the firm online.

Understanding the Difference Between a Tax Filing and a Tax Payment Obligation

Many taxpayers are surprised to learn that they must actually satisfy two distinct tax obligations by the annual April 15 (April 18, 2016, this past tax year) tax deadline. That is, taxpayers are not only required to file their taxes by the tax deadline but also are required to pay their taxes (or a substantial portion thereof) by the deadline. Therefore, taxpayers who miss the tax deadline entirely can face penalties for both a failure to file taxes and a failure to pay taxes. Of the penalties, the failure to file taxes is the obligation that carries the stricter penalty. Individuals who fail to file their taxes can be fined 5 percent of the unpaid taxes (up to a 25% cap) for each month or part of a month that a tax return is late. Penalties for both a failure to pay taxes and failure to file taxes can apply.

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To avoid the penalties that are associated with a failure to file taxes, some taxpayers will file IRS Form 4868 — Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. Still, many people mistakenly believe that filing this form provides additional time to both file and pay taxes. In reality, filing Form 4868 merely extends the amount of time one has to file taxes. It does not extend the amount of time a taxpayer has to pay taxes that are due and owing. In fact, taxpayers who file form 4868 are required to remit a sufficient, estimated tax payment to avoid imposition of penalties and interest.

The Final Tax Filing Deadlines for 2015 Taxes Is October 17, 2016

For individuals who filed a tax extension in April or in the previous months, the tax deadline is now rapidly approaching. This means that all taxpayers, including taxpayers who filed for an extension, must file their taxes with the IRS by October 17, 2016. Taxpayers should also remit any payments for taxes owed as quickly as possible. Taxpayers should ensure that their tax obligations as satisfied as soon as practicable because penalties for the failure to file or pay taxes are imposed for each month or partial month the obligation remains unsatisfied. If either or both obligations remain unsatisfied for even a single day in the month, the full monthly penalty will apply.

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What Should I Do if I Can’t Pay My Taxes by the Extended Deadline?

If you can’t pay your tax bill for the current or even a past year by the tax filing deadline, it may be prudent to consult with an experience tax attorney regarding California FTB or IRS tax relief. An array of tax relief options are available including installment agreements, payment plans, and offers in compromise. An offer in compromise can permit a taxpayer to settle a tax debt at a significant discount. The offer must be based on the reasonable collection potential. Offers that fail to account for this and other factors are not likely to be accepted by the IRS. In general, an experienced and strategic attorney may increase the likelihood that the IRS grants some form of tax relief.

To discuss your unfiled tax or unpaid tax concerns, contact the tax lawyers of the NewPoint Law Group today. To schedule a confidential consultation, call Folsom or Roseville law offices at 1-800-358-0305.