The IRS Tax Tip 2014-53 provided a series of Tax Facts of what to do if a taxpayer cannot pay the full amount of taxes owed, which I have supplemented with a couple Tax Facts from the U.S. Post Office.

1. File the Tax Return on Time to Avoid Late Filing Penalty.  File on time to avoid a late filing penalty.  By mailing or electronically filing the tax return with the postmark before or on Wednesday April 15, a taxpayer will avoid the late-filing penalty, normally 5% per month based on the unpaid balance, that applies to returns filed after the deadline.

2. Can’t File the Tax Return Today? Then File an Extension until October 15!  A taxpayer can use IRS Free File to e-file Form 4868 (PDF) Application For Automatic Extension of Time To File U.S. Individual Tax Return. The extension request must be filed by midnight on April 15.  E-filed extension request will receive an IRS receipt.  A taxpayer may still mail the request for an extension Form 4868, as long at the postmark is before or on April 15.

3. Mail must be Postmarked before or on April 15!  Gone are the days that the post office accepts a 11.59 pm tax return and tax extension letter, postmarking it by midnight April 15.  Thus, the taxpayer must drop off at the post office or post office approved provider before the last pick up time of April 15 to ensure a postmark of April 15.  See https://tools.usps.com/go/POLocatorAction!input.action for the closest post office or post service drop off approved provider within a zip code.

4. Pay as Much of the Tax Due as Possible to Avoid Interest and Late Payment Penalties. In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 15.  The interest rate is currently 3% per year, compounded daily, and the late-payment penalty is normally 0.5 % per month.  Pay as much as possible to reduce interest charges and a late payment penalty.

5. Use a Credit Card to Pay the Tax. The interest and fees charged by a bank or credit card company may be less than IRS interest and penalties. See credit card options

6. Use the Online Payment Agreement tool.  Ask for a payment plan before the IRS sends a bill.  The best way is to use the Online Payment Agreement tool.  File Form 9465, Installment Agreement Request, with the tax return.

Because of the constant changes to the tax law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor. Financial advisors are continually looking for updated tax information that can help them provide the right answers to the right people at the right time. For over 110 years, National Underwriter has provided fast, clear, and authoritative answers to financial advisors pressing questions, and it does so in the convenient, timesaving, Q&A format.

“Our brand-new Tax Facts title is exciting in many ways,” says Rick Kravitz, Vice President & Managing Director of Summit Professional Network’s Professional Publishing Division. “First of all, it fills a huge gap in the resources available to today’s advisors. Small business is a big market, and this book enables advisors to get up-and-running right away, with proven guidance that will help them serve their clients’ needs. Secondly, it addresses the biggest questions facing all taxpayers and provides absolutely reliable answers that help advisors solve today’s biggest problems with confidence.”

“Robert Bloink, Esq., LL.M., and William H. Byrnes, Esq., LL.M., CWM®—are delivering real-life guidance based on decades of experience.  The authors’ knowledge and experience in tax law and practice provides the expert guidance for National Underwriter to once again deliver a valuable resource for the financial advising community,” added Rick Kravitz.

Anyone interested can try Tax Facts on Individuals & Small Business, risk-free for 30 days, with a 100% guarantee of complete satisfaction.  For more information, please go to www.nationalunderwriter.com/TaxFactsIndividuals or call 1-800-543-0874.