So what do you do if you can’t pay your tax when it’s due?

If you find you owe tax after completing your federal tax return but can’t pay it all when you file, there are some options and some things to keep in mind.

  1. Take a Second Look at your Taxes. The large majority of taxpayers overpay on their taxes because they do not take advantage of all available deductions and credits. Before you pay anything, take a second look at your return and if the amount owed is significant, have the return reviewed by a tax professional. The best way to address a tax liability is to reduce or eliminate.
  2. File on time and pay as much as you can. Filing on time ensures that you will avoid the late filing penalty. And if you really do owe, paying as much as you can to reduce the late payment penalty and interest charges.
  3. Consider getting a loan or paying by credit card. If the interest rate charged by your bank or credit card company is lower than those charged by the IRS, it might make sense to get a short-term loan or use a credit card.
  4. Request a payment agreement.  You do not need to wait for the IRS to send you a bill before requesting a payment plan. You can:
  5. Don’t ignore a tax bill.  If you get a bill from the IRS, contact them right away to talk about payment options or have your tax attorney contact them. The best time to resolve any issue with the IRS is early on. The longer it waits, the more likely the IRS will pursue further collection action, including things that may impact your credit.
    • Use the Online Payment Agreement tool at, or
    • Complete and submit Form 9465, Installment Agreement Request, with your tax return. Find out about payment agreement user fees at or on Form 9465.

In short, it is always best to make sure you’ve taken advantage of all deductions and credits, then file on time, pay as much as you can by the tax deadline and pay the balance as soon as you reasonably can.

By: Evan A. Nielsen, Esq. (Licensed in California)