NEW HAVEN, Conn. (WTNH) — There are just 10 days and counting until the tax deadline. According to H&R Block, one in three people wait until April to file their taxes. Often times some people won’t file until a few days before.
While the majority of people get a refund check from the IRS, there are those who have to pay. So what do you do if you wait until the last minute and owe the government money? Not everyone is able to quickly come up with the hundreds or thousands of dollars right away.
“What we always advise is that you file the taxes because the failure to pay penalty is ten times greater than the failure to file penalty,” said Jason Huot, senior tax advisor for H&R Block in New Haven.
You can always set up an installment agreement with the IRS and pay the amount off. However, there is a monthly interest charge.
“You just give them what you got and let the rest go at .5% per month for failure to pay,” said Huot. “If you enter into an installment agreement it drops down to .25% per month or 3% per year which is a pretty reasonable amount. If you don’t file at all the failure to file penalty would be 25% within 5 months.”
Some people will often put what they owe on a credit card. While this is an option, experts say it could cost you more in the long run. Whenever you use a credit card on a normal basis the business pays a processing fee. By law the IRS cannot pay that processing fee, which means you have to. Depending on the tax service you use you can pay upwards of 3%.
As a reminder the tax deadline this year is April 18th.