you will be owing income tax and you don’t have the money to pay the tax. Actually this is not that
an unusual position. Should you file a request for an extension of time to file your tax return? Maybe
not is the answer I would give in this case. The reason is that the IRS and the state have the option of
ignoring an extension request that does not include the payment of the tax owed and the penalty for
late filing of your return, which is what would happen if your extension request is ignored, late, or just
not filed, is a penalty of 5% per month of the unpaid tax up to 25% of the unpaid tax! A smaller penalty
continues after the fifth month but the damage is already done! You can avoid this huge penalty by
filing your return on time even if you do not pay any money with the return is filed. And as practical
manner the IRS and the state allow for the time-payment of the balance due in most cases but you
need to have your return filed before that can happen.
The last idea is something you should have professional consultation and discussions about before you
try it but my point here is that there may be options open to you so that you won’t be stuck with that
huge failure to file penalty.