Learn what to do if you can’t pay the tax due on your return.
- David Greene
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First you should file your return on time even if you cannot pay the amount due. What you do not want to do is ignore the tax due. There are several ways you can arrange to pay the tax to avoid penalties and sometimes interest. First, you can file an automatic extension of time to file. This will give you until October 15 to find the money. However, interest will be charged on the amount you owe from April 15 until paid. The only penalty charged will be a small failure to pay penalty. Second, try to get a loan to pay the tax. The interest rate you pay commercially will probably be lower than the interest you will pay the IRS if you pay late. If you borrow against the equity in your home, that will be deductible for next year. Third, you can pay your taxes by credit card. Go to https://www.irs.gov/uac/Pay-Taxes-by-Credit-or-Debit-Card to learn more. Finally, you can set up an Installment Agreement with the IRS to pay the tax over time.