How does paying federal taxes late affect my 2008 rebate?

April 13, 2008 6:03 AM

If I file my federal taxes on time, but pay late, will it affect the timing of my 2008 rebate? What do I need to do to pay the taxes late?

I'm not going to have a problem filing my taxes on time; the forms have already been completed. Unfortunately, I owe quite a bit this year and can not come up with the money by April 15. Everything I can find on the internet on the subject seems to only address filing for an extension to file, which I don't think I need to do. So, three questions:

One, is there any distinction between filing for an extension (for filing) and paying late? In order to just pay late (which it appears will get me a 0.5% penalty per month, which I can live with) do I just send in my return without a check? What happens then? Will the IRS send me a bill?

Two, will doing what I need to do to pay late (whatever that may be) affect the timing of my stimulus check? It looks like if I owe the IRS money by the time checks are sent, the amount of my check will be reduced by the amount I owe, but will the timing be affected? The amount I owe is roughly $800, and my rebate check will be more than that, so given that the rebates are being made (for those of us with direct deposit) within a month of April 15, I'm thinking the "easiest" option would just be to let them deduct the amount due from the rebate. Is that a viable option, or will my rebate not be processed until my 2007 taxes are paid in full?

Three, If taxes are due (and a refund not made), is getting a direct deposit of my rebate an option? Do I just complete item 74 (bank info) on the 1040 even though it isn't technically applicable to my 2007 return?

posted by anonymous to work & money (5 comments total)

I know for sure that if you send your return in, without a check for what you owe, the IRS will send you a bill for that amount. I did that a couple times when I didn't have the money immediately available. I got the bill sometime in June, as I recall, sent the money in, no problem. You need to send the money in, when you get the bill. Concerning the rebate and your other questions, I would call the IRS.
posted by Chessbum at 6:53 AM on April 13, 2008

Here is the IRS FAQ page relative to the stimulus package. Note that the answer to your question about withholding your 2007 taxes due from your stimulus check is near the bottom of the page.
posted by netbros at 7:07 AM on April 13, 2008

You can also set up a payment plan.

This page says that you do fill out the bank info area of your return:

Q. If I'm not expecting a refund, should I still fill out the direct deposit line on my return so I can get my Stimulus Payment direct deposited?

A. Yes. Even if you aren't due a refund on your tax return, filling out the bank routing information will allow for your Stimulus Payment to be direct deposited.

Hwwever, if you owe money, they will take it from the rebate check first. At least, that's what I understand from my second linked page.
posted by cabingirl at 7:07 AM on April 13, 2008

If you owe anything, it comes out of the rebate check. In my case, the federal government stimulated themselves.
posted by Cat Pie Hurts at 12:22 PM on April 13, 2008

Cat Pie Hurts: Seriously. The rebate check is going to cover all but 8 dollars of my taxes owed this year. It's like they planned it that way.
posted by sideshow at 11:02 AM on April 14, 2008