What to Do If you Cannot Pay Taxes on Time

By | April 13, 2014

If you owe more taxes you can pay your taxes, do not panic. Be sure to file on time. Thus avoid the penalty for filing late taxes and will save you much trouble in the future.


Here’s what to do if you can not pay all your taxes before the deadline.

  • File your return on time and pay as much as possible. This can be possible through online tax software which will let you submit a payment to the IRS. Filing on time is essential  to avoid the late filing penalty .
  • Pay as much as you can to reduce the late payment penalty and interest charges. You can pay electronically, by telephone or by check or money order. Visit IRS.gov for electronic payment options.
  • Get a loan or use a credit card to pay your taxes. Interests and fees charged by a bank or credit card company may be less than the total interest and IRS penalties. For credit card options , see IRS.gov. Use the online tool to request an Installment Agreement. You do not have to wait for the IRS to send a tax bill to request an installment agreement. The most effective way is through Electronic Application for Installment Payment Agreement on IRS.gov. You can also apply by submitting the Form 9465 with your tax return. You can authorize an electronic funds withdrawal from your credit or debit card. That way you will not have to worry about writing a check every month and send it on time. Nor forget to make payments that may result in additional penalties.
  • Do not ignore a tax bill. If you receive a tax bill, do not ignore it. The IRS may initiate a collection process if you ignore the bill. Contact the IRS immediately to discuss your options. If you are facing a financial hardship , the IRS will work with you. Briefly, remember to present time. Pay as much as possible before the deadline of April 15 and pay the remaining debt as soon as possible. Learn more about the collection process on IRS.gov.


Starting an IRS Installment Agreement

If you owe $50,000 or less in combined taxes, penalties and interest, you can apply online; otherwise, you must fill out a more detailed form and mail it in.


What to Do If you Cannot Pay Taxes on Time

An installment agreement allows you to make a series of monthly payments over time. The IRS offers various options for making monthly payments, such as:

  • Direct debit from your bank account;
  • Payroll deduction from your employer;
  • Payment via check or money order;
  • Payment by Electronic Federal Tax Payment System (EFTPS);
  • Payment by credit card via phone or Internet; or
  • Payment by Online Payment Agreement (OPA).


Taxpayer Rights During IRS Collections

You have rights and protections throughout the collection process. If you would like information on arrangements to pay your bill, installment agreements, and what happens when you take no action to pay, refer to Publication 594 (PDF), The IRS Collection Process, and Publication 1 (PDF), Your Rights as a Taxpayer.