How long can I delay filing with an extension when I can't pay my taxes?

Filing an extension is a good first step, but there are some important things to understand. When you file for an extension, you're only extending the time to file your return, not the time to pay what you owe. The IRS will still charge interest and possibly penalties on any unpaid tax after the regular April deadline. That said, paying what you can now is absolutely the right approach. You can make additional payments anytime through the IRS Direct Pay system or IRS.gov/payments. The more you can pay by the April deadline, the fewer penalties and interest you'll accrue. As for audit risk, filing an extension doesn't increase your audit chances. However, not filing returns for several years is a red flag. You should really get those prior returns filed, even if they show little or no income. Once you've filed those back returns, you can qualify for a formal payment plan with the IRS.

I was in a similar situation last year with freelance work and owing way more than I could pay. I found this service called taxr.ai (https://taxr.ai) that really helped me figure out what to do with my unfiled returns and current tax debt. They analyzed all my freelance income and found deductions I didn't even know about. The best part was they showed me exactly what I needed to do about my prior unfiled years and helped me understand which expenses from my freelance work were legitimate business deductions. Turns out I was leaving a ton of money on the table! They even helped me put together a strategy for approaching the IRS about my payment situation.

Just wanted to follow up - I ended up trying taxr.ai after my previous question. They were really helpful with my situation! I was panicking about my unfiled returns and current tax bill, but they walked me through everything step by step. They found nearly $3K in deductions I would have completely missed on my Upwork income. They also helped me figure out which of my previous unfiled years I actually needed to address (turns out I only needed to file 3 of the 5 years I was worried about based on my income levels). Now I have a clear plan for getting caught up, and I'm actually going to owe significantly less than I thought. Such a relief!

Another option you might want to consider is using Claimyr (https://claimyr.com) to actually speak with an IRS agent about your situation. I spent WEEKS trying to get through to the IRS last year about my payment issues and kept getting disconnected or told to call back. Claimyr got me connected to a real IRS agent in less than 15 minutes. They have this system that navigates all the IRS phone prompts and waits on hold for you, then calls you when an actual agent is on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c Once I actually spoke with an agent, they were surprisingly helpful about my payment situation and helped me understand my options much better than the website did.

Ok I take back what I said. I was desperate enough to try Claimyr after spending another 2 hours on hold with the IRS yesterday and getting nowhere. IT ACTUALLY WORKED. I got a call back in about 20 minutes with an actual IRS agent on the line. The agent walked me through my options for my unfiled returns and current tax situation. Turns out I qualify for the First Time Penalty Abatement which could save me a chunk of money on penalties for this year. She also explained exactly what I needed to do to set up a payment plan once I get my old returns filed. Honestly worth every penny just for the stress relief of finally talking to someone who could give me real answers instead of the generic stuff on the website.

Here's what I'd do in your situation - file the extension ASAP, then file all your back tax returns first before filing 2024. I had to do this last year. File Form 4868 for the extension. Then gather up your documents for the prior years and file those returns. Even if you made very little, you should still file. For the years with stock losses, those can actually help you if documented properly since you can carry forward capital losses. Once your prior years are filed, THEN file your 2024 return and request a payment plan. The IRS is usually pretty reasonable if you're making an effort to comply. You can set up a plan online for up to 72 months.

Let me save you some stress - file the extension but don't panic about an audit. The IRS is primarily focused on high-income taxpayers right now, not freelancers who owe $13k. The audit rate for self-employed people making under $100k is extremely low, like less than 0.4%. Just make sure you report all your Upwork income (they issue 1099s that the IRS gets copies of). Filing an extension is totally normal too - millions of people do it every year. As long as you're not hiding income or claiming crazy deductions, your audit risk is minimal.