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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Drew Angerer/Getty Images October 04, 2021 Cynthia Widmayer is an insurance contributor for Bankrate and has over two years of experience as a personal finance writer. She covers home, car and life insurance products for Bankrate, The Simple Dollar and Coverage.com among others. Lance Davis is the Vice President of Content for Bankrate. Lance leads a team responsible for creating educational content that guides people through the pivotal steps in their financial journey. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our banking reporters and editors focus on the points consumers care about most — the best banks, latest rates, different types of accounts, money-saving tips and more — so you can feel confident as you’re managing your money. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. If you owe taxes but can’t afford to pay them, you have three options: A monthly installment plan. An offer in compromise. Partial payments. You can choose one of these solutions to take care of taxes owed, depending on your financial situation. Monthly installment agreement
The IRS offers flexible payment agreements to those who can pay the taxes they owe eventually. These are monthly installment plans that will accrue interest like any loan, and typically have a length of 72 months provided the amount including taxes, penalties and interest doesn’t exceed $50,000. All you have to do is sign up for a or send after you have filed your tax return. This option only works if you paid all past returns. Also, current taxes will continue to accumulate while you’re on the payment plan, and without proper budgeting, you can keep owing money to the IRS year after year. Offer in compromise
If you just don’t have the money to pay the taxes you owe, you can request an offer in compromise. This option enables you to request the IRS to settle your tax debt for less than what you owe, but the IRS will consider your ability to pay, your income, expenses and asset equity to determine if you qualify for this arrangement. If your tax debt is huge and you have limited assets to pay for it, an offer in compromise might be a good idea. With this option, you pay 20 percent of your debt upfront and the rest in installments. If, however, the IRS thinks that you have the ability to pay your taxes within the next ten years, it may not approve your offer. What’s more, it can sue you if your offer is accepted but you fail to follow through your payments. Partial payments
Regardless of how much you owe the IRS, and whether or not you can pay it, don’t neglect to file your return. You can make a partial payment when you file and continue to make small payments each month within your budget. This not only reduces some of your tax burden but also gives the IRS a favorable impression of you. Also, the failure to file on time has a harsher penalty than failing to pay; an interest rate of 4.5 percent a month is charged for not paying on time, compared to the 0.5 percent charged for failing to pay. By making partial payments the IRS will be more willing to help you figure out a payment plan. Other options to help you pay your taxes
There are other options available to you to get the funds for your taxes. These options will always vary according to your specific circumstances. 1 Borrow from friends or family
Having trusted friends and/or family members to lend you money can be a solution for paying your outstanding tax bill. Keep in mind, however, that money borrowed by friends and family can complicate your relationship with them if you have trouble repaying them back. What’s more, the loan must be repaid, so you’re stuck with yet another payment even if you clear your taxes. 2 Request an extension
Generally, you can to file your taxes. This won’t save you money, but rather it will buy you time to arrange for your funds. 3 Pay with your credit card
Paying your tax bills through a third party may be convenient but it may not be the wisest option. You’ll end up paying more than you actually owe the IRS after the addition of interest and convenience fees. Getting hit with a tax bill that you can’t afford to pay back at once isn’t the end of the world. You should still file on time but consider sending a partial payment and then consult a revenue officer about an installment plan. You may even get legal help from a tax consultant if your case is too complicated or you owe too much in taxes. Learn more
SHARE: Cynthia Widmayer is an insurance contributor for Bankrate and has over two years of experience as a personal finance writer. She covers home, car and life insurance products for Bankrate, The Simple Dollar and Coverage.com among others. Lance Davis is the Vice President of Content for Bankrate. Lance leads a team responsible for creating educational content that guides people through the pivotal steps in their financial journey. Related Articles