October 15, the deadline to file extended individual tax returns is fast approaching. This is a great time for a reminder that the extension applies to the filing due date, and it is not an extension of the due date to pay. Penalty and interest are still charged to an account if the resulting tax liability is not fully paid on April 15.
The terms “penalty and interest” sound gruesome enough on their own. Now throw in the fact that they’re showing up on an IRS notice, and it might be enough to make some taxpayers’ bones quiver.
But what if you don’t have the cash to pay the entire bill at once? The IRS will allow individuals to set up an installment plan, but that cost you too. Penalty and interest are still due, and on top of that there is a one time set up fee that can cost over $100. As scary as a large tax liability can be, surely one wouldn’t want to make it worse by adding to it. Well don’t fret, we have a viable solution: pay it down with a credit card and owe the bank instead of the IRS.
By: Anthony Mifsud, Staff Accountant
