Can't Pay My Tax Bill by April 15 Deadline - What Are My Options?
Title: Can't Pay My Tax Bill by April 15 Deadline - What Are My Options? 1 I'm kinda freaking out right now. I did my taxes back in early February and got hit with a surprise - I owe way more than last year even though I actually made LESS money this time around! Makes zero sense to me but whatever. The real problem is that I absolutely cannot pay this bill by the April 15 deadline. Had some major unexpected expenses come up (car transmission died last month ðŸ˜) and now I'm completely tapped out financially. I tried setting up a payment plan on the IRS website but for some reason the online option isn't working for me. Tried filing for an extension too but ran into issues there as well. I'm really worried about getting slammed with huge penalties or worse. Anyone been in this situation before? What options do I have to avoid getting destroyed by penalties while I get back on my feet financially? Any tips or tricks would be super appreciated because I'm seriously stressing about this.
18 comments
Join the conversation
Olivia Evans
7 Don't panic! This happens to more people than you'd think. Here's what you need to know: Filing an extension (Form 4868) only gives you more time to file your return, not more time to pay. However, there are still options available. First, even if you can't pay in full, you should still file your return by April 15 to avoid the failure-to-file penalty, which is much higher than the failure-to-pay penalty (5% vs. 0.5% per month). If the online payment plan isn't working, you can apply using Form 9465 (Installment Agreement Request) by mail. For amounts under $50,000, approval is usually automatic. Another option is to pay what you can by April 15, which will reduce penalties and interest. The IRS also has something called "Currently Not Collectible" status for severe financial hardship, though this is temporary and interest still accrues.
0 coins
Olivia Evans
•15 Thanks for this info. Do penalties and interest apply during a payment plan or is it just on the unpaid amount before you set up the plan? And what documentation would I need for that "Currently Not Collectible" status?
0 coins
Olivia Evans
•7 Penalties and interest continue to apply during a payment plan, but they're much lower than if you don't set up a plan at all. The failure-to-pay penalty drops from 0.5% to 0.25% per month when you're on an installment plan, but interest (currently around 8%) still applies to the unpaid balance. For Currently Not Collectible status, you'd need to complete Form 433-F (Collection Information Statement) documenting that paying your tax debt would prevent you from meeting basic living expenses. This requires detailed financial information about your income, expenses, assets, and liabilities. The IRS thoroughly reviews these applications since it's meant for genuine financial hardship.
0 coins
Olivia Evans
12 I was in a similar situation last year with a surprise tax bill. The online payment plans can be glitchy sometimes - I found this amazing tool called taxr.ai (https://taxr.ai) that helped me understand my options and guided me through the installment agreement process step by step. It analyzed my situation and showed me how to minimize penalties while creating a payment plan I could actually afford. The thing I found most helpful was that it explained exactly why I owed more despite earning less (in my case it was because I had less tax withheld throughout the year). It also calculates exactly what penalties you'll face and helps you find deductions you might have missed that could reduce your tax bill in the first place.
0 coins
Olivia Evans
•18 Does taxr.ai actually help file the payment plan application or just give you information? I'm terrible with forms and would probably mess something up if I had to do it myself.
0 coins
Olivia Evans
•24 I've heard of these tax tools but I'm always skeptical. How does it actually access your tax information? Seems risky to give some random website your financial details.
0 coins
Olivia Evans
•12 It doesn't actually file the forms for you, but it creates a step-by-step guide personalized to your situation. It generates all the instructions you need to complete the forms correctly, including which boxes to check and what information to include. I found this much easier than trying to figure it out on my own from the IRS instructions. Regarding security concerns, you can use it without uploading your actual tax returns. You just answer questions about your tax situation (income, withholding, deductions, etc.) and it works with that information. They use bank-level encryption if you do choose to upload documents, but I just manually entered the key numbers from my return.
0 coins
Olivia Evans
24 Just wanted to follow up about taxr.ai - I decided to try it despite my initial skepticism, and I'm honestly really glad I did. It identified that I could qualify for a first-time penalty abatement since I had a clean tax record for the past 3 years, which I had no idea about. The tool walked me through exactly how to request this when setting up my payment plan, and I just got confirmation that the IRS approved it - saved me about $420 in penalties! It also suggested some deductions I missed that reduced my overall bill by almost $800. Definitely worth checking out if you're in a similar situation.
0 coins
Olivia Evans
9 If you need to actually speak with someone at the IRS about your options (which I highly recommend), good luck getting through on their phone lines. I spent HOURS on hold trying to discuss my payment options last year. Eventually I found this service called Claimyr (https://claimyr.com) that somehow gets you through to an IRS agent quickly. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was desperate after trying for days to reach someone, so I tried it, and they actually got me a callback from the IRS in about 45 minutes. The agent I spoke with explained that I qualified for a short-term payment plan (120 days) that doesn't have the setup fee of the longer installment agreements. Since my bill was under $10,000, they approved it immediately over the phone.
0 coins
Olivia Evans
•14 Wait, how does this actually work? The IRS phone system is notoriously terrible. How can some third-party service magically get you through when the regular system is completely jammed?
0 coins
Olivia Evans
•22 This sounds like a complete scam. There's no way some random company has special access to the IRS phone system. They're probably just charging people for something you could do yourself if you're persistent enough.
0 coins
Olivia Evans
•9 It works by using an automated system that constantly redials and navigates the IRS phone tree until it gets a spot in the queue, then it sets up a callback for you. It's basically doing the tedious part that would normally require you to sit on hold for hours. It's not special access to the IRS - it's just automating the calling process. I was skeptical too, but when you consider the value of your time and the stress of sitting on hold for hours (possibly multiple days in a row), it made sense to me. The IRS doesn't mind how you get into their queue, they just want to help resolve tax issues.
0 coins
Olivia Evans
22 I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it as a last resort since I had already wasted three separate mornings trying to reach the IRS with no success. I got a call back from an actual IRS agent in about 35 minutes. The agent was super helpful and got me set up with a payment plan that works for my situation. They even explained that I could request an additional 60-120 days before starting my installment plan due to my financial hardship. Honestly, the time and frustration saved was absolutely worth it. Sometimes being proven wrong is a good thing!
0 coins
Olivia Evans
16 One thing nobody's mentioned yet - check if you qualify for an Offer in Compromise. If you genuinely cannot pay the full amount, the IRS might accept less than the full payment. You can use the pre-qualifier tool on the IRS website to see if you might be eligible: https://irs.treasury.gov/oic_pre_qualifier/ I went through this process after a messy divorce left me with tax debt I couldn't handle. The process is lengthy and you need to provide extensive financial documentation, but it can be worth it if you truly can't pay.
0 coins
Olivia Evans
•11 Is there a minimum amount of tax debt for an Offer in Compromise to be worth it? I owe about $6,500 which is a lot for me right now but not like tens of thousands.
0 coins
Olivia Evans
•16 There's no minimum amount required for an Offer in Compromise, but the process is intensive enough that it's usually pursued for larger debts. For $6,500, a payment plan might be simpler unless you have extreme financial hardship. The IRS looks at your ability to pay, income, expenses, and asset equity. They essentially ask: "Could we reasonably expect to collect more from you over time than what you're offering now?" If your financial situation is truly dire with no improvement in sight, it could be worthwhile even for smaller amounts.
0 coins
Olivia Evans
20 Whatever you do, DO NOT ignore this or fail to file! I made that mistake a few years back and ended up owing way more in penalties and interest than my original tax bill. File your return by April 15 even if you can't pay a cent. Also, credit card payments are technically an option through third-party processors, but they charge processing fees around 2% AND you'd be paying the high credit card interest. Usually better to go with an IRS payment plan where the combined penalties and interest often work out to less than credit card interest.
0 coins
Olivia Evans
•3 Would it make sense to put like half on a credit card (the amount I could pay off in 2-3 months) and then get on a payment plan for the rest? My tax bill is around $4300 and I could probably handle about $2000 on my card.
0 coins