Mike Sachon: Have you done your taxes?
Logan Sachon: What do you think?
Mike: That’s what I was scared of. I’d hoped you’d done them. You’re running out of time, girl.
Logan: I’m going to file an extension.
Mike: Right. But you know that you still have to pay on time right? The extension is just for filing.
Logan: Well, right. But the fees on paying late are way less than if you don’t file an extension.*
*Fee for not filing/including not filing an extension: 5% of balance owed each month up to 25%, so, if I owe $2,000, which is a nice, round, hopeful number, my penalty would be at minimum $100 and at most $500, plus the original $2,000 that I owe, PLUS the fee for not paying, PLUS interest. This is a lot of money.
Fee for not paying: .5% of balance owed each month until paid off in full. So, on a $2,000 tax bill, that would be $10 a month until I paid, which doesn’t seem terrible to me, but is obviously not ideal.
Interest: In addition, the IRS also charges interest on unpaid taxes, currently 3% a year (not bad). On $2,000, that would be $60 a year, which comes out to 16 cents a day, which comes out to, I don’t care about this at all.
Mike: Well, write a check for what you can.
Logan: Um, what makes you think I have any money to pay my taxes?
Mike: That’s just sad. That makes me sad.
Logan: It’s fine. IT’S FINE. It’s fine. It’ll work out. It’ll be fine.
Mike: Okay. You’re not going to listen to me anyway, but send what money you can. Look up all the fees, it’s not worth it not to pay.
Logan: Right. Let’s talk about you. Have you done your taxes?
Mike: Of course not. I always do them the night before.
Mike Sachon is Logan’s dad, among other things.