Remember when the IRS extended the annual tax deadline at the beginning of the coronavirus pandemic to July 15? Did you pay your freelance income taxes then —or did you decide to file an extension? If you opted to file an extension, it’s now time to file your taxes so you don’t miss the deadline of October 15 and end up being hit with late filing fees and penalties.
If your cash flow is slower this year due to the coronavirus pandemic, it’s still critical to pay as much of the tax you owe as possible. Failing to do so will subject you to more interest (if you didn’t pay by July 15, you’ve been accruing 0.5% interest on the balance since then, even with an extension), plus penalties on any tax obligations that remain outstanding after October 15.
As a freelancer, you should always try to pay your taxes in full, but if it’s just not possible for you to do so and you filed an extension, here’s a plan of action to help you mitigate as much of the negative financial impact as possible.
1. File your taxes by the October 15 extension deadline.
Even if you can’t pay the full