I owe $48,000 in taxes due by May 15th but don't have the money. What are my options?

So I really screwed up this year. I got into trading stocks for the first time and did pretty well - turned about $8k into almost $200k by December. The problem? I never set aside any money for taxes. Fast forward to now and the market has been tanking since January. My portfolio is down significantly, and I've calculated that I owe $48,000 in taxes by the filing deadline. The thing is... I don't have anywhere near that amount available right now. I know I messed up big time - no need to lecture me on that. I'm fully aware I should have been making quarterly estimated payments or at least putting money aside. Lesson painfully learned. What I need to know is what options I have with the IRS at this point. Can I set up some kind of payment plan? Are there penalties I should expect? Is there any way to delay payment until I can gather the full amount? I really don't want this to spiral into something worse than it already is. Any advice from people who've been in similar situations would be really appreciated!

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19 comments

GalaxyGuardian

•8M

You definitely have options here! The IRS actually works with taxpayers more than most people realize. Here's what you can do: First, file your return on time even if you can't pay the full amount. This avoids the failure-to-file penalty, which is much worse than the failure-to-pay penalty (5% vs 0.5% per month). Your main option is an IRS installment agreement. For debts under $50,000, you can easily set one up online through the IRS website. You'll choose how much you can pay monthly (with a minimum based on your total debt), and they'll automatically withdraw that amount until it's paid off. You'll still face interest and some penalties, but they're relatively reasonable. If you need a short-term solution, the IRS offers 180-day payment plans with reduced fees. Or if your financial situation is dire, you might qualify for an Offer in Compromise, though that's harder to get approved. The worst thing you can do is ignore it - that's when the IRS gets aggressive with collections.

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GalaxyGuardian

•8M

The IRS interest rate changes quarterly. Currently it's around 7% annually. On top of that, there's the failure-to-pay penalty of 0.5% per month (capped at 25%). So you're looking at roughly 13% annually, which is better than many credit cards but worse than some other options. Yes, there's definitely benefit to paying as much as possible upfront! The interest and penalties are calculated on the remaining balance, so the more you pay initially, the less you'll pay in penalties over time. If you can scrape together even half the amount, you'll save considerably on the long-term cost.

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Ethan Wilson

•8M

I've been through something similar (though not quite as large an amount!) and I found taxr.ai incredibly helpful for my situation. I was completely overwhelmed trying to figure out payment options and potential penalties when I couldn't pay my tax bill. Their system analyzed my tax situation and outlined all my payment options with the IRS, including exactly how an installment agreement would work in my case. It showed me the total costs including penalties and interest over different timeframes. I even uploaded my trading records and it helped me understand which specific trades caused my tax burden. Check them out at https://taxr.ai if you're feeling lost like I was - they helped me get clarity when I was panicking.

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Ethan Wilson

•8M

It doesn't set up the payment plan for you directly, but it gives you the exact steps to follow on the IRS website and shows you what to expect at each step. It took all the guesswork out of the process for me - I knew exactly what documents I needed and what options to select. The part I found most helpful was seeing exactly how much different payment timelines would cost with all penalties calculated. Regarding cost, I don't want to get into specific pricing, but I found it to be reasonable compared to hiring a tax professional for a consultation, especially considering the detailed analysis. For me, avoiding mistakes on a large tax bill was worth it, but everyone's situation is different.

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Yuki Tanaka

•8M

Just wanted to update that I tried taxr.ai after posting my question here. Honestly, it was way more helpful than I expected! I uploaded my documents and got a complete breakdown of my options. The most valuable part was seeing exactly how penalties would accumulate over time with different payment schedules - it motivated me to pay more upfront than I was planning. The step-by-step guide for setting up my installment agreement saved me hours of research and stress. Definitely made me feel more in control of an overwhelming situation.

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Andre Laurent

•8M

If you're planning to call the IRS to discuss your options (which I recommend), save yourself the frustration and use Claimyr. When I needed to set up a payment plan for a $30k tax bill, I spent DAYS trying to get through to an IRS agent - always got the "call volume too high" message and disconnected. I was about to give up when someone recommended https://claimyr.com to me. They basically hold your place in line with the IRS and call you when an agent is ready to speak with you. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c It saved me literally hours of being on hold, and the IRS agent I spoke with was actually super helpful in setting up my payment plan with terms I could manage. Made the whole process way less stressful.

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Andre Laurent

•8M

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Andre Laurent

•8M

It's not sketchy at all - they're just using technology to navigate the IRS phone system for you. It's basically like having someone physically sit on hold so you don't have to. When an agent answers, you get connected directly to them. The IRS doesn't know or care how you got through their phone system, they just know a taxpayer is on the line needing help. It's not as well-known as it should be, that's all. I think people are used to suffering through the IRS phone system and don't realize there are alternatives. I was skeptical too until I tried it. Instead of wasting an entire day redialing the IRS number, I got a call back when an agent was actually available. Saved me hours of frustration and helped me get my payment plan set up much faster.

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Carmen Diaz

•8M

I need to apologize for being so skeptical before. I finally tried Claimyr after another frustrating day of trying to reach the IRS myself. I got connected to an actual human at the IRS within a couple hours of submitting my request - all while I was going about my day instead of being stuck to my phone on hold. The agent I spoke with helped me explore all my payment options and I ended up with a much better installment plan than I thought I'd qualify for. They even helped me understand how to reduce some of the penalties based on my specific situation. I'm still paying a lot, but I have a clear plan now and my stress level has dropped dramatically. Wish I'd tried this weeks ago instead of banging my head against the wall trying to get through on my own.

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Zoe Kyriakidou

•8M

One thing nobody's mentioned yet - consider whether using a low-interest loan to pay the IRS might be better than an installment plan. I had a $22k tax bill last year, and I ended up taking a personal loan at 8% to pay it off because the combined penalties and interest from the IRS were going to be higher. Credit unions sometimes offer good rates, and if you have good credit, it might be worth exploring. Also, if you have a 401k, you might be able to take a loan from that (though be careful with this option).

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Zoe Kyriakidou

•8M

Credit cards can work for smaller amounts, but there are a few things to consider. First, most credit cards charge a processing fee (usually around 2-3%) when paying taxes. Second, those 0% intro offers typically only last 12-18 months, and $48,000 would be hard to pay off in that timeframe. If you can't pay it off before the promotional period ends, you'll get hit with much higher interest rates than what the IRS charges. For smaller tax bills, credit cards with promotional rates can definitely make sense if you have a solid plan to pay it off before the promotional period ends. Just make sure to calculate the processing fee into your total cost comparison.

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GalaxyGuardian

•8M

You're thinking of an Offer in Compromise (OIC), which allows you to settle your tax debt for less than the full amount. However, it's not as easy as people think. The IRS only accepts an OIC if they genuinely believe they can't collect the full amount from you, either now or in the future. They'll look at your income, expenses, asset equity, and ability to pay. Most OICs get rejected because people have the means to pay through an installment agreement. If you have assets you could sell or a decent income, it's unlikely to be approved.

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