How To Buy Time To Pay Taxes Without Penalty

I know this sounds too good to be true. And, for those taxpayers whose taxable income equals or exceeds $100,000, it is too good to be true. But if your income is under that threshold, read on.

Take a look at the instruction booklets that came with your tax returns. Specifically, look at the page that has the instructions for the line called Tax. As an example, that happens to be Page 30 in the 2011 Form 1040A Instruction Booklet. The instructions ask "Do you want the IRS to figure your tax for you?" If you say Yes, you are directed to read chapter 29 of Pub. 17 for details.

So what does Pub 17 say? It says:

You can have the IRS figure your tax on Form 1040EZ, Form 1040A, or Form 1040 if you file your return by April 15, 2012. If you paid too much, we will send you a refund. If you did not pay enough, we will send you a bill for the balance. To avoid interest or the penalty for late payment, you must pay the bill within 30 days of the date of the bill or by the due date for your return, whichever is later. The IRS will also figure the credit for the elderly or the disabled and the earned income credit.

"You can have the IRS figure your tax on Form 1040EZ, Form 1040A, or Form 1040 if you file your return by April 17, 2012. If you paid too much, we will send you a refund. If you did not pay enough, we will send you a bill for the balance. To avoid interest or the penalty for late payment, you must pay the bill within 30 days of the date of the bill or by the due date for your return, whichever is later. The IRS will also figure the credit for the elderly or the disabled and the earned income creditfor you."

There are some eligibility rules, such as you can't itemize and you can't be using certain forms or schedules, but other than that, this is a great deal. IRS Pub 17 is available for reading online here or you can download it in Adobe PDF format here.

So go ahead, don't use those tax tables to figure your tax. Let the IRS do the arithmetic and get a free ride for a minimum of 30 days.