This year's deadline for filing income tax returns came and went last week.
What is next for you, to remain in compliance or to resolve any lingering tax issues?
In this post, we will use a Q & A format to address commonly arising questions.
What if you didn't file?
If you didn't file your taxes, you still can. In fact, if you have a refund coming, there is no penalty for filing late.
Even if you owe taxes, it makes sense to file and pay as much as you can. This does not only help you minimize penalties and interest. It also prevents you from getting into a pattern of nonfiling that can lead to a possible nonfiler investigation by the IRS.
What if you can't pay your entire tax bill?
In this situation, many people choose to enter into an installment agreement (IA) to pay off tax debt through monthly installments. Both the IRS and the California Franchise tax Board (CFTB) allow for this possibility.
As we explained in a previous post on installment agreements, there are certain eligibility limitations for using them. But if the IA is accepted, it can be a good way to resolve tax debt.
Are there other options besides installment agreements?
Absolutely. They include an offer in compromise (OIC) and currently not collectible (CNC) status.
An OIC can enable you to resolve your tax debt with the IRS for less than the full amount owed. Getting CNC status can get the IRS to stop trying to collect your tax debt due to financial hardship.
If I'm entitled to a refund, when will that come?
The IRS now has a refund tracking tool available online. You can also call 800-829-1954.
What if I need to change something on my return?
If you have changes that affect your correct income, filing status or deductions, you can file an amended return. This has to be done on paper, not electronically. The applicable form is Form 1040X.