The number one rule is to file as soon as possible, even if you can’t pay the entire balance due (see payment options later). Filing your return quickly will lessen the penalties and interest you may have to pay. And although the IRS cannot waive interest charges, it will consider reductions in penalties if there is reasonable cause for the late filing and payment. The quickest way to file is to e-file with your local CPA, e-file through a tax software vendor or, for taxpayers with income of $50,000 or less, you qualify to file your return for free at www.irs.gov/freefile. The free file will not offer tax help, but will perform basic math calculations.
Taxpayers also want to file as soon as possible to determine if refunds are due. If you are entitled to a refund, you will not be charged any penalties or interest for filing after the due date. Please note that if your return is not filed within three years of the due date, you could forfeit your right to the refund.
When you do file, pay as much as you can. You can pay by debit card, check, or request an installment agreement. Taxpayers who owe $50,000 or less in combined tax, penalties and interest, can file online at IRS.gov and self-qualify for and receive immediate notification of approval of an installment agreement. You may also file Form 9465 – Installment Agreement Request. Finally, for balances more than $50,000, taxpayers are required to complete a financial statement to determine the monthly payment amount for the installment plan.