Filing Chapter 7 and Tax Returns

[IBroke]

Does anybody know if there is a special form to file when somebody is intending to pay in October or does the IRS automatically start to "extend" the payment-window to October and charge interest and penalties if taxes aren't paid by mid April? I just want to make sure that they don't start any derogatory actions after April 17th. My mother uses e-file by TurboTax and I think one payment-option is "paying by check post-dated April 17th" or so. I assume that is the option she would have to select.

I guess after filing it would be a good idea to give the IRS a call to tell them when to expect the payment - or is this unnecessary?

BTW, does anybody know if my mother could already start paying monthly installments - let's say $200 - in January so that the tax would be paid in full by October?

[HHM]

Ibroke

You cannot EXTEND the time to pay. Payment is Due April 15 (or whatever the day is on the year). You only get an extension to "file" the return. So, no, there is no form that you fill out letting the IRS know you will pay in October.

The only real downside to not paying in April is that you will get charged interest between April 15 and the time you actually pay.

[PANSYFACE]

When you file for an extension you have the additional time to file a return but you should send in as much money as possible with the extension. It will decrease the amount of penalties and interest that are assessed later.

Also - your mother should be paying in estimated payments quarterly anyway so that all the tax is paid in before she files and it would ease the burden of having to come up with a couple thousand at once.

There's no point in calling the IRS to tell them a payment is coming later unless you had received correspondence from them about an overdue payment.

Hope this helps.

[IBroke]

Ibroke

You cannot EXTEND the time to pay. Payment is Due April 15 (or whatever the day is on the year). You only get an extension to "file" the return. So, no, there is no form that you fill out letting the IRS know you will pay in October.

The only real downside to not paying in April is that you will get charged interest between April 15 and the time you actually pay.

Thanks, HHM.

I just wanted to make sure that there won't be any derogatory consequences other than the penalties and interest (if they are $90 for $2K taxes due, they don't pose a problem at all) by not paying by April and paying in October that could have been avoided by filing something (as I said before, I'm not a tax-expert so I certainly don't know which forms exist and which don't..).

[IBroke]

When you file for an extension you have the additional time to file a return but you should send in as much money as possible with the extension. It will decrease the amount of penalties and interest that are assessed later.

Also - your mother should be paying in estimated payments quarterly anyway so that all the tax is paid in before she files and it would ease the burden of having to come up with a couple thousand at once..

That is a good idea. In the past, that never came up because her business was very new and her income very low. In 2010, her taxes due were $70 (yeah, that's no typo). In 2011, it was $350 and in 2012, it will be around $2K because her business is finally on track. A couple of months ago, my mother didn't even think of filing for BK so the fees for that were actually "set aside" for her 2012 taxes. Now, with the opportunity to strip the second mortgage ($150K), I urged her to use the funds for this opportunity - and since the attorney is basically asking for $2K as well, we are currently trying to balance the budget. To make things worse, my brother died in an accident in May which is giving us additional mental distress (especially my mother) - and financially, this was hard to swallow, too.

But I'm confident that we will be able to handle this situation.