IRS: You have ‘options’ if you can’t pay your taxes by the April 15 deadline

**Understanding Tax Payment Options for Individuals Facing Financial Constraints** If you find yourself unable to fully pay your taxes by the April 15th deadline, the IRS strongly recommends filing your return on time and paying what you can.

Despite the common misconception, filing for an extension only grants you more time to file your return, not to pay your taxes.

To avoid accruing excessive interest and penalties, it’s crucial to file your return by the deadline.

Failing to file triggers a penalty of 5% per month, capping at 25% of your unpaid balance.

In contrast, the late payment penalty is a more lenient 0.5% per month, with a maximum penalty of 25%.

If you need assistance, the IRS offers several payment options that can help you spread out your tax payments over time, including: * **Short-Term Payment Plan:** For balances under $100,000, you can pay off your debt within 180 days.

* **Long-Term Payment Plan:** For balances under $50,000, you have up to 72 months to pay off your debt.

These payment plans can be applied for online, by phone, or by mail.

Notably, the online application process is quick and efficient, providing an immediate response of approval or denial.

Under an installment agreement, the late payment penalty is reduced by half.

However, it’s important to note that you will still incur interest charges and any remaining late payment penalties.

By taking advantage of these payment options, you can avoid the more severe penalties associated with failing to file or pay your taxes.

The IRS encourages individuals to take this opportunity to regulate their financial situation and minimize the impact of unpaid taxes.