Today TaxMama hears from Joe in the TaxQuips Forum with lots of questions. Edited down he’s asking: “Is it true that you cannot efile prior year returns? I need to file for this year and last year. I expect to owe money for each year, but don’t need a long-term installment agreement. What form shall I use? And what shall I do?”
At this time, IRS is not set up to accept prior year e-filed returns. They will be in the near future.
If you are filing the current year tax return and expect to have money by October, don’t ask for an installment agreement. Put your tax return on extension. You will have until 10/15/10 to file.
You will have the same level of underpayment penalties and interest as if you filed your tax return in April – you just won’t start the IRS collections process until later.
Go out and earn or borrow the money you need to pay the taxes – and file and pay in full in October.
See how much less complicated this is?
As to installment agreements in general? They are not designed for 36-60 years – they are designed for 36-60 MONTHS! Use Form 9465 http://www.irs.gov/pub/irs-pdf/f9465.pdf
Yes, you need to file tax returns separately for each year.
So figure out your 2009 balance due – file it and pay in October. Next, if you owe money for 2008, file it, along with a Form 9465 and propose a payment plan that pays it off in 12-24 months. Your installment agreement will be automatically accepted as long as your balance due is under $25,000.
And remember, you can find answers to all kinds of questions about balances due and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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