Question from a reader, “Happy Easter and Passover, Kim. What I want to know is, am I better off filing my tax return now (I may not owe but I need to get all my paperwork together still), should I get an extension and pay a small amount until I file or file owing a little and then amend the tax return later to get back my refund? What is the best way to handle this?”
My answer is my famous Easter and Passover response of “It depends.” You don’t want to be too Easter to file if you are entitled to a refund and you shouldn’t Passover a chance for getting your money back that you paid in income taxes. It boils down to your financial situation and the amounts of income and taxes that we are talking about.
If you are talking about owing a few hundred dollars, I would suggest either filing showing that you are owing it and pay it and then amend the return or file the extension and pay the money up front anyways. If you don’t have the money and feel that once the dust settles on getting your tax info together file that you are anticipating a refund . (Oh, and hey, next year get it ready earlier, okay? That way you won’t be in this situation.)
If you are owing thousands and out of work, file showing you owe the money and call the IRS and explain that you want to work out a payment plan with them. They will work with you.
The monkey wrench is if you didn’t get it right the one way or the other but the bigger wrench is if you don’t file. The IRS is pointing out that they are really willing to work with people and they “get it”. They know that people are out of work and losing their homes. They are under mandate to try and get people out of trouble if they can help them and work things out and possibly settle on easier terms (those last words were my interpretation of what they are saying but your mileage may and will vary with your own dealings with the agency).
Go for trying to file one way or another and remember you can amend a tax return up to 3 years later. Just don’t put off the filing any longer. There are a lot of people who are running late and not calling the taxing agencies for help. They can help you now before you hit the filing date so do what you can to get everything going before April 15. Get it done now before you start celebrating the holidays over the weekend and forget!
Hope that helps and have a very Good Friday, a Happy Easter and a continuing Happy Passover.
Apr 10 2009 Mid Day
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Kim Isaac Greenblatt
Extension, Amend and Easter Passover