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That interest rate can jump to 1 percent, however, if the tax bill hasn't been paid within 10 days after the IRS issues a notice of intent to levy. But if you work out a payment plan with the IRS, it will reduce the rate to one-quarter of 1 percent. The last thing you want to do is miss the tax filing deadline and not ask for an extension. That triggers a penalty of 5 percent of the tax owed for each month the tax return is late, for up to five months. It's best not to try to calculate what you might owe in penalties and interest, the IRS will send a bill if you underpay. What about filers who haven't sorted out their tax return yet and don't know how much they owe? "They can send a payment to the IRS based on what they believe will be their tax debt, and once they have the extra six months, they can square everything away," said Annabel Marquez, a spokeswoman for IRS. If your earnings were roughly the same in 2011 as in 2010, the easiest way to estimate what you owe is to add in slightly more than you owed last year. If you overpay, you'll get a refund after you file your return. If you underpay, you'll have to pay a penalty and interest on the difference. The IRS accepts payments by check, online or by phone using a credit or debit card. More details on making payments are available on the IRS website.
[Associated
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