Running out of Time: Tax time is here again, and although you scrimped and saved to pay your taxes on time while things were going well- you lost your job. With bills mounting and your unemployment check not cutting it, you know you can’t pay your taxes on time. Don’t Fret- as long as you have legitimate reasons why you pay on time, getting more time to pay your taxes is a possibility!
Big Relief: Lucky for you the- law is on your side! Most people don’t know this, but there’s a form you can file that will give you an Extension of time to pay your taxes. (Form 1127 “Application for Extension of Time for Payment on Tax”). It may be hard- but you can win the extension!
Steps to Salvation:
1) You must prove to the IRS that although you did save money to pay for your taxes, you lost your job and now you can’t pay your taxes. Proving you made an effort is important.
2) You must prove that paying on time will cause an economic hardship for you. Give them detailed information about basic your living expenses and show them how little you make in unemployment by comparison.
3) You must agree to give the IRS security for the unpaid tax. This means the IRS will place a Lien on you. It may sound like a bad idea- but if you were to just pay your bill late instead of requesting an extension- the IRS would likely place a Lien on you anyway. If you have no assets, this will not apply to you.
Act Fast: Proving you are making an effort to pay is the key to getting an Extension with the IRS. The IRS will take note of how soon you let them know you are unable to pay. Do not file for an Extension AFTER the tax due date! If you know you wont be able to pay your taxes on time, Act Now!
Now You Have the Smoking Gun…Use it!