Early to file, late to pay
April 11, 2008 5:02 PM Subscribe
So I've already filed my tax returns for 2007. But I won't have the money to pay my April 15th taxes until next month. How badly will this hurt me?
Due to my line of work I pay quarterly estimates, and know that on April 15th I owe a thousand dollars to the state for this quarter, and another thousand dollars to the state that I accidentally didn't pay from a 2007 quarterly estimate. (I'm all paid up for the Federal taxes until the middle of the year.)
My accountant said something about how I wasn't being penalized for that overdue grand due to the fact that last year was my first year paying taxes in my new state. However it's now my second year, and I won't have the money to pay my 2 grand in total state taxes until May. How will I be penalized?
Specifically, how much will the state charge me for being a month late in paying my estimate and penalty, and will this affect my credit or have any other negative repercussions for the year ahead?
Thank you!!
Due to my line of work I pay quarterly estimates, and know that on April 15th I owe a thousand dollars to the state for this quarter, and another thousand dollars to the state that I accidentally didn't pay from a 2007 quarterly estimate. (I'm all paid up for the Federal taxes until the middle of the year.)
My accountant said something about how I wasn't being penalized for that overdue grand due to the fact that last year was my first year paying taxes in my new state. However it's now my second year, and I won't have the money to pay my 2 grand in total state taxes until May. How will I be penalized?
Specifically, how much will the state charge me for being a month late in paying my estimate and penalty, and will this affect my credit or have any other negative repercussions for the year ahead?
Thank you!!
Specifically, how much will the state charge me for being a month late in paying my estimate and penalty, and will this affect my credit or have any other negative repercussions for the year ahead?
Among other things, this depends on the state. Seconding "ask your accountant," I'm afraid.
posted by nebulawindphone at 5:16 PM on April 11, 2008
Among other things, this depends on the state. Seconding "ask your accountant," I'm afraid.
posted by nebulawindphone at 5:16 PM on April 11, 2008
Said the psychiatrist to his crazy patient: "dude, you need professional help!"
But seriously, anonymously, what state? I may not have answer, but I'm sure the answer will depend on what state you're in.
posted by Unsomnambulist at 5:49 PM on April 11, 2008
But seriously, anonymously, what state? I may not have answer, but I'm sure the answer will depend on what state you're in.
posted by Unsomnambulist at 5:49 PM on April 11, 2008
A, it depends on the state how much they charge.
B, I've heard they are pretty cool with letting you pay what you can, when you can, with the penalties. As long as you file the proper paperwork. If it was me, I'd make as much of a first quarter payment as I could, while filing the proper paperwork. And pay the balance when you get it. But that depend on the state you're in.
posted by gjc at 6:42 PM on April 11, 2008
B, I've heard they are pretty cool with letting you pay what you can, when you can, with the penalties. As long as you file the proper paperwork. If it was me, I'd make as much of a first quarter payment as I could, while filing the proper paperwork. And pay the balance when you get it. But that depend on the state you're in.
posted by gjc at 6:42 PM on April 11, 2008
Not much. Filing on time is the important thing. Paying later is lesser deal.
posted by rokusan at 7:07 PM on April 11, 2008
posted by rokusan at 7:07 PM on April 11, 2008
Without any state information, I wouldn't be able to give you an answer. But have you tried any of the state departments of revenue? They'd probably be able to help you find your answer, or at least a number which to call.
posted by Weebot at 7:12 PM on April 11, 2008
posted by Weebot at 7:12 PM on April 11, 2008
As long as you call them and set up a payment plan, they're usually pretty willing to work with you. And don't let them bully you if they try, they can't squeeze money out of a stone and they know it. They may ask you to disclose the location of all of your assets and then ask questions like "can't you pay it with a credit card or take out a line of credit? Can't you cash out your 401k?" ... don't give in. Unless you actually have cash and you're just saving for a rainy day and you actually COULD pay it, you just wouldn't have your rainy day fund. Guess what? It's raining.
Best handle it though -- some states will just go and sieze it , sometimes in as short of a time period as a month past due, if you haven't contacted them to make arrangements. I had this experience with the Oregon Employment Department.... suddenly I started bouncing checks out of my business account. I went and checked it and they'd withdrawn $2300 a few days before.
posted by SpecialK at 7:29 PM on April 11, 2008
Best handle it though -- some states will just go and sieze it , sometimes in as short of a time period as a month past due, if you haven't contacted them to make arrangements. I had this experience with the Oregon Employment Department.... suddenly I started bouncing checks out of my business account. I went and checked it and they'd withdrawn $2300 a few days before.
posted by SpecialK at 7:29 PM on April 11, 2008
As a side note -- if you're paying quarterlies, that typically means you're a sole proprietor / consultant / independent contractor. You need a rainy day fund. You need to have six months of income stashed away in a place where you can't milk it, and you
If you aren't making enough to pay your taxes and you aren't making enough to put some away in savings, then you are not a "going concern" and you should get out of that line of work. Save yourself the hassle now and get at least a part time job to help support yourself, or start charging more or something. In case you couldn't tell, I'm giving you this advice from past experience.
posted by SpecialK at 7:32 PM on April 11, 2008
If you aren't making enough to pay your taxes and you aren't making enough to put some away in savings, then you are not a "going concern" and you should get out of that line of work. Save yourself the hassle now and get at least a part time job to help support yourself, or start charging more or something. In case you couldn't tell, I'm giving you this advice from past experience.
posted by SpecialK at 7:32 PM on April 11, 2008
In every state I'm aware of you can file for an extension, and as others have said, so long as you let them know, its usually not a big deal. There may be a small penalty associated, but oftentimes there's not even that.
That said, if you don't tell them or even worse bounce a check you send them, they will be VERY unhappy and the white-hot wrath of a thousand burning suns will descend upon you. For real. Don't even THINK about getting cute with ANY tax agency. It's how they put Al Capone away, after all.
posted by ChasFile at 7:33 PM on April 11, 2008
That said, if you don't tell them or even worse bounce a check you send them, they will be VERY unhappy and the white-hot wrath of a thousand burning suns will descend upon you. For real. Don't even THINK about getting cute with ANY tax agency. It's how they put Al Capone away, after all.
posted by ChasFile at 7:33 PM on April 11, 2008
Important: you can file an extension, but you still owe the money now. (Filing an extension doesn't give you an interest- and penalty-free ride until you file taxes. You still owe on 4/15.)
So file on the 15th, pay *any* amount you can, and sign up for a payment plan. They'll charge you a penalty and interest, and they'll let you know how much. When I did this I think I paid them $1000 on April 15, and then I paid $500/month until nearly the next April 15. (I owed $6000 total, minus penalty/interest.) It sucked because I was careless filing my quarterly taxes, but overall I think they got me for something like 7% apr. So doing it this way is MUCH BETTER than paying with a credit card at up to 20% interest.
posted by iguanapolitico at 8:37 PM on April 11, 2008
So file on the 15th, pay *any* amount you can, and sign up for a payment plan. They'll charge you a penalty and interest, and they'll let you know how much. When I did this I think I paid them $1000 on April 15, and then I paid $500/month until nearly the next April 15. (I owed $6000 total, minus penalty/interest.) It sucked because I was careless filing my quarterly taxes, but overall I think they got me for something like 7% apr. So doing it this way is MUCH BETTER than paying with a credit card at up to 20% interest.
posted by iguanapolitico at 8:37 PM on April 11, 2008
This is really pretty simple. Go to your state's tax department website and search for "payment plan". They do, in fact, want to make it easy for you to pay, and they don't have the resources to get medieval with every chump who's late a couple of weeks. Sure, they'll charge you penalties, but maybe with a payment plan it will be less.
posted by dhartung at 12:51 AM on April 12, 2008
posted by dhartung at 12:51 AM on April 12, 2008
Call the state, talk to them, set up payment plan. No biggie.
posted by CwgrlUp at 4:05 PM on April 12, 2008
posted by CwgrlUp at 4:05 PM on April 12, 2008
This thread is closed to new comments.
posted by Blazecock Pileon at 5:06 PM on April 11, 2008