Need more time to pay taxes?

All taxpayers should file on time, even if they can’t pay what they owe. This saves them from potentially paying a failure to file penalty. Here are four tips for those who can’t pay their taxes in full by due date:

1. File on time and pay as much as possible. Pay online, by phone at IRS2Go app, or by check or money order.
2. Get a loan or use a credit card. Interest and fees charged by a bank or credit card may be less than IRS interest and penalties.
3. Use Online Payment Agreement Tool. Taxpayers can file Form 9465, Installment Agreement Request, with their tax return.
4. Don’t ignore a tax bill. The IRS may take collection action.

Private collection of some overdue Federal Taxes start in April; those affected will hear first from the IRS, IRS will still handle most tax debts.

 Taxpayers: Watch Out for Scam Calls

Starting this month, IRS will begin sending letters to a relatively small group of taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies. New program, authorized under federal law enacted by Congress in December 2015, enables designated contactors to collect, on the government’s behalf, unpaid tax debt. Usually, unpaid individual tax obligations that are not currently being worked by the IRS collection employees and often were assessed several years ago.

Taxpayers being assigned to a private firm would have had multiple contact from the IRS in previous years and still have an unpaid tax bill.

The IRS also urges taxpayers to be on the lookout for scammers who might use this program as a cover to trick people. In reality, taxpayers whose accounts are assigned as part of the private collection effort know they have a tax debt.

Program began this week, a few hundred taxpayers receiving mailing and subsequent phone calls, with the program growing to thousands a week later in spring and summer. Taxpayers with overdue taxes will always receive multiple contacts, letters and phone calls, first from the IRS not private debt collectors.

Tips to Know about the Home Office Deduction

Six tips to keep in mind about the home office deduction:

1. Regular and Exclusive Use. Must use a part of their home regularly and exclusively for business purposes. Part of a home used for business must also be:

• A principal place of business, or
• A place taxpayers meet clients or customers in the normal course of business, or
• A separate structure not attached to the home.

2. Simplified Option. To use the simplified option, multiply the allowable square footage of the office by a rate of $5. Maximum square footage allowed in 300 square feet.

3. Regular Method. This method includes certain costs paid for a home. For example, part of the rent for rented home may qualify. For homeowners, part of the mortgage interest, taxes and utilities paid may qualify. The amount deducted usually depends on the percentage of the home used for business.

4. Deduction Limit. Gross income from business use of a home is less than expenses, deduction for some expenses may be limited.

5. Self-Employed. Taxpayers who are self-employed and choose the regular method should use Form 8829.

Employees. Employees must meet additional rules to claim the deduction. Business use must also be for the convenience of the employer. If qualified, claim the deduction on Schedule A, Itemized Deductions.