Finding out you owe the IRS can be stressful, especially if you were expecting a refund. The good news is that you have options. Even if you can't pay your entire tax bill by the deadline, the IRS offers several ways to help you manage what you owe and avoid more serious collection actions.
The most important thing to remember is this: file your tax return on time, even if you can't pay the full balance. Filing late can trigger additional penalties that are often more expensive than the penalties for paying late.
When Is My Tax Payment Due?
For most taxpayers, any tax due is payable by the federal filing deadline, typically April 15.
If you don't pay by the deadline, the IRS generally charges interest and a failure-to-pay penalty on any unpaid balance until it's paid in full. Filing your return on time and paying as much as you can helps reduce those extra costs.
10 Tips If You Owe Federal Taxes
1. Pay Your Tax Bill as Soon as Possible
The fastest way to stop additional interest and penalties from growing is to pay your balance in full.
If you can't pay everything at once, pay as much as you can. Even a partial payment reduces the amount subject to ongoing penalties and interest.
2. Request Additional Time to Pay
If you need a little extra time, you may qualify for a short-term payment arrangement through the IRS.
Most taxpayers who owe less than $100,000 in combined tax, penalties, and interest may qualify for a short-term payment plan that provides up to 180 days to pay in full.
3. Consider Paying by Credit or Debit Card
The IRS accepts payments by credit card, debit card, and digital wallet through approved payment processors.
Before choosing this option, compare processing fees and interest charges on your card with the penalties and interest you would otherwise owe the IRS. In some situations, using a lower-interest credit card may cost less overall.
4. Use Electronic Payment Options
The IRS offers several secure electronic payment methods, including:
- IRS Direct Pay
- Electronic Federal Tax Payment System (EFTPS)
- Payments through your IRS Online Account
- Debit card, credit card, or digital wallet payments
Electronic payments are generally the fastest and most convenient way to pay.
5. Set Up an Installment Agreement
If you can't pay your tax bill in full, you may be able to make monthly payments through an IRS installment agreement.
To qualify, you generally must be current on all required tax returns and stay current with future filing and payment obligations while the agreement is active.
6. Apply Online for a Payment Plan
The IRS Online Payment Agreement tool makes it easy to apply for a payment plan.
You may qualify for:
- Short-term payment plan: Owe less than $100,000 in combined tax, penalties, and interest and can pay within 180 days.
- Long-term payment plan (installment agreement): Owe $50,000 or less in combined tax, penalties, and interest and make monthly payments over time.
Many taxpayers receive an approval decision immediately after completing the online application.
7. Submit Form 9465
If you'd rather apply by mail, you can submit Form 9465, Installment Agreement Request.
Use this form to request a monthly payment plan when you're unable to pay your balance in full. The IRS will review your request and notify you of its decision.
8. Be Prepared to Provide Financial Information
Taxpayers with larger balances due may need to provide additional financial details.
The IRS may request Form 433-F, Collection Information Statement, to help determine an appropriate payment arrangement based on your financial situation.
9. Understand Payment Plan Fees
Some IRS payment plans include setup fees, although fees are generally lower when you apply online and choose automatic bank withdrawals.
Low-income taxpayers may qualify for reduced fees, fee waivers, or fee reimbursement in certain situations. Because fees can change, check the current IRS fee schedule before applying.
10. Adjust Your Tax Withholding for Future Years
If you owe taxes regularly, consider updating your Form W-4 with your employer.
Adjusting your withholding can help ensure enough federal tax is withheld throughout the year, reducing the chances of receiving an unexpected tax bill next filing season.
You can use the IRS Tax Withholding Estimator to help determine the appropriate withholding amount.
What If I Accidentally Paid the IRS Twice?
If you accidentally make a duplicate payment, contact the IRS as soon as possible to explain the situation.
Have the following information ready:
- Payment dates
- Payment amounts
- Confirmation numbers
- Bank or credit card records
The IRS can review your account and determine whether you're entitled to a refund or credit adjustment.
If you scheduled a future payment and need to cancel it, cancellation deadlines depend on the payment method used. Review the payment instructions provided at the time you scheduled the payment for the most current requirements.
Need Help With Tax Debt?
If you can't pay your tax bill in full, don't ignore it. The IRS offers several options that may help, including:
- Short-term payment plans
- Installment agreements
- Offer in Compromise programs for eligible taxpayers
- Temporary collection delays in certain hardship situations
Taking action quickly can help reduce penalties, limit collection activity, and give you more choices for resolving your tax debt.
Additional Resources
- IRS Tax Debt Help Tool
- Publication 594: The IRS Collection Process
- Publication 966: Electronic Payment Options
- IRS Forms Line: 800-829-3676
- IRS Individual Assistance: 800-829-1040