Oct. 15 is the deadline for tax extensions, Here's what to do in the event that your amount is still unpaid

If you are still unable to pay your amount, experts advise that you have choices beyond the October 15 deadline for tax extensions.The deadline for federal taxes this year was April 15. If they are unable to meet the deadline, they can request a six-month extension to file by submitting Form 4868.

However, even though the tax extension gave additional time to submit, the deadline for 2023 taxes was April 15. IRS fines and interest are still accruing on overdue taxes in the interim.

Many individuals are surprised by it, according to Josh Youngblood, the enrolled agent and owner of The Youngblood Group, a tax agency with offices in Dallas.

The late payment penalty is 0.5% of your outstanding sum per month or partial month, up to a maximum of 25%, if you missed the tax deadline. In addition, interest on overdue taxes will be incurred.

In contrast, the penalty for failing to submit is 5% of the unpaid taxes for each month or part of a month, up to 25%.

In catastrophe zones, some taxpayers do, however, automatically receive an extension to file and an extension to pay.

Even if you are unable to pay, file your return.

If you are unable to pay your taxes, the IRS offers alternatives, "but you have to be current on your filing requirement," according to Tom O'Saben, an enrolled agent and the National Association of Tax Professionals' director of tax content and government relations.

According to the IRS, there are "many payment options" available online after filing, and many filers will get an instant approval or denial of payment plan requests without having to call.

According to O'Saben, "if you owe less than $50,000, setting up a payment plan with the IRS is almost going to be automatic."

"Installment agreements," or IRS online payment plans, consist of:

A short-term payment plan can be an option if the total amount owed, including tax, penalties, and interest, is less than $100,000. You have up to 180 days to complete the payment.

Long-term payment plan: If the total amount due, including interest, penalties, and taxes, is less than $50,000, this option might be available. You have up to 72 months to pay off the sum, but you must pay each month.

The IRS states that while the arrangement is in place, an IRS payment plan may reduce your late payment cost in half, even if interest and penalties would still accrue.

According to O'Saben, one drawback of IRS payment plans is that your outstanding sum may be reduced by future tax refunds.

"Don't disregard it."

The IRS will send notices to you if you owe money on your taxes, and experts advise that keeping in touch with the organization is essential.

Youngblood advised, "Don't ignore it because it won't go away." "I've seen clients who come in with a large stack of unopened IRS letters."

He went on, "The IRS is not as bad as they think." "They genuinely wish to collaborate with others." (*)