What should I do if I can’t pay my state taxes by the deadline?

If April 15 is fast approaching and you haven’t completed your state tax return yet, or cannot afford to pay what you owe in state taxes, it isn’t the end of the world. The consequences for not paying state taxes on time may not be as severe as you may think--however, there are some simple things you can take before the deadline passes that can help keep the issue from escalating.

If you are unable to file your tax return by the yearly deadline of April 15, or simply do not want to, you can receive an automatic extension of four months by completing and filing a Form 4868 with the Internal Revenue Service (IRS) by April 15. This will give you until August 15 to file your tax return without sustaining any tax penalties.

If you need more time than this, you can then ask for a second extension with the filing of a Form 2688. This must be filed by August 15 in order to be approved, and you must state a good reason that you still cannot pay the taxes. For example, if your tax preparer is sick and you require more time to find a new one, or if you have been very ill yourself and you normally prepare your own taxes, you may be granted a secondary extension. If this second extension is approved, you will have until the 15th of October to file your tax return.

If you cannot afford to pay the total of what you owe in taxes, go ahead and file the return and send what you can afford to pay. The penalty for not filing a return at all can be as much as 25 percent, whereas the penalty for not paying what you owe after you filed is only half of a percent of the taxes you owe per month. If you neither file a tax return by April 15 nor request an extension, you will receive a penalty of between five and 25 percent of the taxes due, in addition to interest on the taxes you owe.

It is important to also note that automatic extensions do not extend a person’s time to pay their taxes--only an extension to file.

If you have legal questions about your state taxes, it is important to consult with an experienced tax attorney before it is too late.

This article is not intended to give out legal advice.


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