WASHINGTON — The Internal Revenue Service today urged taxpayers whose
tax-filing extension runs out on Oct. 15 to double check their returns for
often-overlooked tax benefits and then file their returns electronically using
IRS
e-file
or the
Free
File system.
About a quarter of the 13 million taxpayers who requested an automatic
six-month
extension
this year have yet to file. Although Oct. 15 is the last day for most people,
some still have more time, including members of the military and others serving
in
combat
zone localities who typically have until at least 180 days after they leave
the combat zone to both file returns and pay any taxes due.
“If you still need to file, don’t forget that you can still file
electronically through October 15,” said IRS Commissioner John Koskinen. “Many
people may not realize they may be eligible to use Free File available on
IRS.gov/freefile. Free File is free tax software that takes the guesswork out
of return preparation. Even if you’re filing in the final days, filing
electronically remains easy, safe and the most accurate way to file your
taxes.”
Check Out Tax Benefits
Before filing, the IRS encourages taxpayers to take a moment to see if they
qualify for these and other often-overlooked
credits
and deductions:
- Benefits for low-and moderate-income workers and
families, especially the Earned Income Tax Credit. The special EITC
Assistant can help taxpayers see if they’re eligible.
- Savers credit, claimed on Form
8880, for low-and moderate-income workers who contributed to a
retirement plan, such as an IRA or 401(k).
- American Opportunity Tax Credit, claimed on Form
8863, and other education
tax benefits for parents and college students.
Health Care Tax Reporting
While most taxpayers will simply need to check a box on their tax return to
indicate they had health coverage for all of 2014, there are also new lines on
Forms
1040,
1040A
and
1040EZ
related to the health care law. Visit
IRS.gov/aca
for details on how the Affordable Care Act affects the 2014 return. This
includes:
- Reporting health insurance coverage.
- Claiming an exemption from the coverage requirement.
- Making an individual shared responsibility payment.
- Claiming the premium tax credit.
- Reconciling advance payments of the premium tax credit.
Properly doing so can help maintain continued eligibility for premium
assistance in 2016.
The
Interactive Tax Assistant tool can also help determine if a taxpayer
qualifies for an exemption, needs to make a payment or is eligible for the
premium tax credit.
Taxpayers who intend to claim the Health
Coverage
Tax Credit for 2014 must first file an original 2014 tax return without
claiming the HCTC, even if they have no other filing requirement . They can
then file an amended return when the IRS issues further HCTC guidance. Visit
irs.gov/hctc for updates.
E-file Now: It’s Fast, Easy and Often Free
The IRS urges taxpayers to choose the speed and convenience of electronic
filing. Fast, accurate and secure, filing electronically is an ideal option for
those rushing to meet the Oct. 15 deadline. The IRS verifies receipt of an
e-filed return, and people who file electronically make fewer mistakes too. Of
the nearly 144 million returns received by the IRS so far this year, about 86
percent or over 124 million have been e-filed.
Taxpayers who purchase their own software can also choose to e-file, and
most paid tax preparers are now required to file their clients’ returns
electronically.
Everyone can use Free File, either the brand-name software, offered by the
IRS’s commercial partners to individuals and families with incomes of $60,000
or less, or online fillable forms, the electronic version of IRS paper forms
available to taxpayers at all income levels.
Join the eight in 10 taxpayers who get their refunds faster by using direct
deposit and e-file. Taxpayers can choose to have their refunds deposited into
as many as three accounts. See
Form
8888 for details.
Quick and Easy Payment Options
The IRS
Direct
Pay system offers taxpayers the fastest and easiest way to pay what they
owe. Available through the
Pay Your Tax Bill icon on IRS.gov, this free online system allows
individuals to securely pay their tax bills or make quarterly estimated tax
payments directly from checking or savings accounts without any fees or
pre-registration. So far this year, more than 4.1 million tax payments totaling
over $15 billion have been received from individual taxpayers through Direct
Pay.
Taxpayers can also pay by debit or credit card. While the IRS does not
charge a fee for this service, the payment processer will. Other e-pay options
include the
Electronic Federal Tax Payment System (pre-registration is required) and
Electronic
Funds Withdrawal which is available when e-Filing. Taxpayers can even e-pay
what they owe using,
IRS2Go
, the agency’s popular mobile phone app. All of the electronic payment options
are quick, easy and secure and much faster than mailing in a check or money order.
Those choosing to pay by check or money order should make the payment out to
the “United States Treasury.”
Taxpayers with extensions should file their returns by Oct. 15, even if they
can’t pay the full amount due. By doing so, taxpayers will avoid the
late-filing penalty, normally five percent per month, that would otherwise
apply to any unpaid balance after Oct. 15. However, interest, currently at the
rate of 3 percent per year compounded daily, and late-payment penalties,
normally 0.5 percent per month, will continue to accrue.
Fresh Start for Struggling Taxpayers
In many cases, those struggling to pay taxes qualify for one of several
relief programs. Most people can set up a payment agreement with the IRS on
line in a matter of minutes. Those who owe $50,000 or less in combined tax,
penalties and interest can use the
Online
Payment Agreement to set up a monthly payment agreement for up to 72 months
or request a short-term payment plan. Taxpayers can choose this option even if
they have not yet received a bill or notice from the IRS.
Taxpayers can also request a payment agreement by filing
Form
9465. This form can be downloaded from IRS.gov and mailed along with a tax
return, bill or notice.
Alternatively, some struggling taxpayers qualify for an
Offer-in-Compromise.
This is an agreement between a taxpayer and the IRS that settles the taxpayer’s
tax liabilities for less than the full amount owed. Generally, an offer will
not be accepted if the IRS believes the liability can be paid in full as a lump
sum or through a payment agreement. The IRS looks at the taxpayer’s income and
assets to make a determination regarding the taxpayer’s ability to pay. To help
determine eligibility, use the
Offer
in Compromise Pre-Qualifier, a free online tool available on IRS.gov.
Details on all filing and payment options are on IRS.gov.
