If you owe tax but cannot pay the full amount by the deadline, file your return on time anyway to avoid the failure-to-file penalty, which is often higher than the failure-to-pay penalty.
Payment Options
- Short-Term Payment Plan: You may be granted up to 180 days to pay your liability in full (interest and penalties still apply).
- Installment Agreement (Monthly Payments):
- Online Payment Agreement (OPA): If you owe $50,000 or less, you can often set up a monthly payment plan online immediately.
- Form 9465: You can also apply by mailing Form 9465 (Installment Agreement Request).
- Offer in Compromise (OIC): This allows you to settle your tax debt for less than the full amount owed if you can prove you are unable to pay. It requires a detailed financial disclosure and application fee (unless you meet low-income guidelines).
Official IRS Resource:Online Payment Agreement Application