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Tax Tips: Need More Time to Pay?

Taxes are due Tuesday. Don't panic if you can't afford to pay everything you owe, says the IRS. There are still some options available.

Can't pay everything you owe the federal government by Tuesday? Don't panic, says the Internal Revenue Service. Though you should try to pay as much as you can by Tuesday's April 17 tax deadline to avoid penalties and interest, there are still a few options for those who can't afford it.

Pay by credit or debit card. Though it's good practice not to carry a balance on your credit card, the card's interest rate may be less than the IRS charges. You can use all major credit cards—American Express, Discover, MasterCard and Visa—to pay your taxes, and the IRS will not charge an extra fee. Nevertheless, if you pay by debit or credit card, you may have to pay the processing company an additional convenience fee, according to the IRS. Don't add the convenience fee to your tax payment. For a list of processing companies and electronic payment options, visit irs.gov/e-pay.

Request additional time to pay. The IRS may grant taxpayers additional time to pay their bill in full, depending on the circumstances, according to the agency. Additional time to pay can be requested through the Online Payment Agreement application at IRS.gov or by calling 800-829-1040, according to the IRS.

"Taxpayers who request and are granted an additional 60 to 120 days to pay the tax in full generally will pay less in penalties and interest than if the debt were repaid through an installment agreement over a greater period of time," according to the IRS. "There is no fee for this short extension of time to pay.

Apply for an installment agreement. Taxpayers can apply for an installment agreement using the Online Payment Agreement application on IRS.gov, which allows taxpayers who owe $50,000 or less in combined tax, penalties and interest to self-qualify, apply for, and receive immediate notification of approval, according to the IRS. Installment agreements can also be requested before

You can also request an installment agreement by completing and submitting a Form 9465 or Form 9465-FS (Installment Agreement Request), making a request in writing or calling 800-829-1040.

Taxpayers with balances of more than $50,000 must complete a financial statement to figure out what the monthly payment will be for an installment plan.

Eric Dee April 19, 2012 at 02:09 PM
Great article, very informative. Guess the IRS isn't that unforgiving.

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