If you owe taxes and can’t pay them, don’t panic. File your taxes by the deadline and learn about your options. The important thing is to make a plan and pay what you can.
File your tax return by the deadline
You should still file your tax return by the deadline (usually April 15) and try to pay as much as you can to avoid penalties and interest. If you don’t file your taxes by the deadline, you will be charged a fee each month you are late, for up to 5 months. You will also be charged a penalty for not paying your taxes by the filing date (usually April 15) or for sending a check that can’t be cashed because of a lack of money in the account.
Make sure the amount is correct
Make sure you need to pay the amount. If you have an IRS notice and don’t think you owe that amount, call the number on the notice to discuss it.
Figure out what you can afford to pay
Think about your current and future money matters and make a list of your monthly costs, any debts you owe, and how much you make. From there, figure out how much you can afford to pay. If you choose to start a payment plan, make sure you can keep those payments on time.
You may also think about different ways you can raise money, such as borrowing from family and friends or taking out a loan. Interest rates and fees charged by a bank may be lower than what the IRS charges.
Think about using a payment plan
The options below are from the IRS. Note that unless you pay the full amount owed, you will be charged interest and penalties.
Keep in mind that it’s important to respond to an IRS notice. The IRS has the right to take action to collect the money if you don’t pay your taxes. Learn more about the IRS collection process.
| Financial Situation | Payment Options | Fees, Penalties, or Interest |
| If you can pay the full amount | You have several options for paying the amount in full:
|
Service fee for credit or debit card
No interest or penalties Financial institutions may charge a fee for EFW Cash payments are charged a $1.50 fee per payment |
| If you can pay the full amount within 180 days or less | Request a 180-day extension one of the following ways:
|
No service fees
Penalties and interest will increase until the owed amount is fully paid |
| If you need more than 180 days to pay the full amount | There are a couple of different ways to set-up a long-term payment plan.
Automatic payments using the Direct Debit Installment Agreement |
Apply online: $31 set-up fee
Apply by phone, mail, or in-person: $107 set-up fee Low income: $31 fee waived Penalties and interest will increase until the owed amount is fully paid |
| Pay amount without automatic payments using Direct Pay, debit/credit card (service fees involved), check or money order. | Apply online: $130 set-up fee (low income: $43 set-up fee, which may be refunded if you meet the requirements)
Apply by phone, mail, or in-person: $225 set-up fee (low income: $43 set-up fee may be refunded if you meet the requirements) Penalties and interest will increase until the owed amount is fully paid Service fees vary for credit/debit card |
|
| If you won’t be able to pay off the full amount | An Offer in Compromise (OIC) is a deal between you and the IRS that reduces your tax debt if you can’t afford to pay. Check your OIC eligibility.
|
$205 application fee plus first payment. If you meet Low Income Certification guidelines, you don’t need to send the fee or the first payment
Penalties and interest will increase while your application processes |
| If you can’t make any payments | If paying taxes would keep you from paying for basic needs, you can ask to Temporarily Delay the Collection Process by reporting your account as currently not collectible. You will still owe the amount. Call the IRS for help at 800-829-1040 or call the number on your bill or notice. | Penalties and interest will increase until the owed amount is fully paid |
