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You need to pay the IRS

Amount owe in the income tax return
JohnKwan / Shutterstock

If you still owe money on your 2019 federal return, estimate your tax bill and pay as much as possible as soon as you can.

A tax bill that wasn’t paid by the July deadline is subject to late fees and interest, even if you were granted the extension to get your return in. If you don’t file or pay by the Oct. 15 deadline, the penalties could get even worse.

The IRS charges a penalty of 5% of the unpaid taxes for each month your return and payment are late, up to a maximum 25%. You'll also be charged interest on the delayed taxes.

Can’t afford to pay the full amount? You should still file your return by the Oct. 15 extension deadline, then contact the IRS to see if you qualify for a relief program, like an installment plan.

Meanwhile, if you’re owed a refund, you’ll need to file a tax return before the IRS will fork over your funds. And the tax agency will only make good on an overdue refund for three years, so the sooner you file, the better off you’ll be.

Some taxpayers are automatically eligible for further extensions:

  • Members of the military serving in combat zones generally have 180 days after they leave the zone to file their tax returns.
  • Taxpayers affected by natural disasters also automatically qualify for a lengthier extension. Visit the disaster relief page on the IRS website for more information.

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You need to submit your return

If you do owe the IRS money, you should estimate the amount and pay it immediately to avoid further late fees. Taxpayers can make their payments online, over the phone, or even with the IRS2Go app on their mobile phones.

If you’re ready to file, you can use tax preparation software to make the process a lot less complicated.

Or visit a tax preparation specialist to help you complete and file your tax return. Just try not to show up on Oct. 15.

Reduce your tax bill for next time

office work and metaphor for the payment of taxes
mizar_21984 / Shutterstock

Does your tax bill feel a bit bloated? Here are six ways you can trim it in time for next year.

1. Contribute to a 401(k) or traditional IRA. Putting money into a pretax retirement account will reduce your taxable income, and in turn reduce the amount owed to the IRS. Seek out expert financial planning advice — which is even available online now — to make the best choices for your retirement goals.

2. Contribute to an IRA. Contributions to traditional IRAs are tax-deductible if you meet certain criteria, and there are strict limits on what you can deduct. If you don’t have an IRA, you can start one using just your spare change.

3. Leverage your student loan. If you’re still paying off those pesky student loans, you might be able to leverage that debt into tax savings. You can deduct up to $2,500 in interest paid on student loans each year, as long as you earn less than $70,000.

4. Turn medical expenses into tax savings. If you had any major medical expenses in the past year, you may be able to get a big, fat tax deduction for them. Any qualified medical or dental expenses that exceed 7.5% of your adjusted gross income for the 2020 tax year can be deducted, if you have enough write-offs to itemize. Hefty out-of-pocket costs may be a sign that it’s time to shop for a new health insurance, if you buy your own.

5. Get expert help. If you want to make sure you’re paying the lowest amount possible, get help from experts, like the tax pros at H&R Block. In addition to possibly cutting your tax bill, the professional assistance will lower your stress levels, too.


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About the Author

Ethan Rotberg

Ethan Rotberg

Former Reporter

Ethan Rotberg was formerly a staff reporter at MoneyWise. His background includes nearly 15 years as a writer, editor, designer and communications professional. He loves storytelling, from feature writing to narrative podcasts. His work has appeared in the Toronto Star, CPA Canada and Metro, among others.

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The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.