Some taxpayers get 6 extra months to pay
Many who were unemployed in 2011 or 2012 or were self-employed business owners who lost 25% of their income can delay their tax payments to Oct. 15 without penalty.
This post is by Tom Herman of The Wall Street Journal.
But this year some people are eligible for additional time to pay without getting hit by a stiff penalty.
First, some background: In most cases, the official deadline to file and pay is Tuesday, April 17. (It's usually April 15, but that falls on a Sunday this year, and April 16 is a holiday in Washington, D.C.) Those who can't meet the April 17 deadline can ask the Internal Revenue Service for a six-month filing extension. That would give them until Oct. 15 to file -- but it wouldn't give them more time to pay.
Recently, though, the IRS announced plans for "new penalty relief" for some taxpayers who still owe after April 17.
The IRS is granting a new six-month grace period on failure-to-pay penalties for "certain wage earners and self-employed individuals." The request for an extension to pay any taxes owed will result in "relief from the failure-to-pay penalty for tax year 2011 only if the tax, interest and any other penalties are fully paid by Oct. 15, 2012." (Post continues below video.)
This special relief is available to two types of taxpayers. One is "wage earners who have been unemployed at least 30 consecutive days during 2011 or in 2012 up to the April 17 deadline for filing a federal tax return this year." The second is for self-employed individuals who experienced "a 25% or greater reduction in business income in 2011 due to the economy."
But there are strict income limits. "A taxpayer's income must not exceed $200,000 if he or she files as married filing jointly or not exceed $100,000 if he or she files as single or head of household," the IRS says. "This penalty relief is also restricted to taxpayers whose calendar year 2011 balance due does not exceed $50,000."
But don't expect any relief from interest on the amount owed. The IRS says it still is legally required to charge interest on unpaid back taxes and doesn't have the authority to waive this charge. The rate is currently 3% on an annual basis.
More from The Wall Street Journal and MSN Money:
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Pay to the order of the Internal Revenue Service..Twenty Thousand and no/100 frequent flier miles. [This is equivalent to $500].
Memo section: Questions? Please contact Citi. Thanks. Watch for black out periods.
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