What are your options if you end up owing taxes?
If you can't pay your bill in full, do not despair


Most people file their taxes hoping to get a refund. But that is not always how it pans out. In some cases, you may end up owing the IRS money instead of getting some back in your pocket.
If you end up in this situation, the simplest way to settle the matter is to pay your bill in full. But for many, whether due to rising costs or a lack of financial stability, that is not an option. It is important to note that even "if you can't pay your taxes, you still need to file your tax return so you don't get hit by failure-to-file penalties, which are a lot higher than the penalties for not paying your bill on time," said Ramsey Solutions, a financial education website.
Once you have filed, here is a rundown of some of the ways you can settle the amount owed.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Ask for an extension
Think you could make the payment if you had just a bit more time? "The IRS will provide taxpayers up to 180 days to pay their full tax balance," and there is "no fee to request the extension," said H&R Block.
That said, a penalty on the unpaid balance will apply, and the IRS will charge interest "at the short-term federal rate plus 3% (interest may change each quarter)," said H&R Block.
Set up an IRS payment plan
Taxpayers who cannot make their full tax payment by the deadline can apply for an IRS payment plan. There are both short- and long-term plans available, with eligibility depending on how much you owe. "The IRS offers a short-term payment plan (120 days or less) for bills that are less than $100,000," while "long-term monthly plans are available for balances less than $50,000," said Ramsey Solutions.
Just note there is a setup fee involved (though it may be waivable in certain situations) and a penalty fee, while reduced, still applies. Plus, "interest is charged at the short-term federal rate plus 3% (interest may change each quarter)," said H&R Block.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Request an offer in compromise
An offer in compromise "lets you settle your tax debt for less than the full amount you owe," said SmartAsset. However, "this option is available if you can demonstrate that paying the full amount would cause financial hardship," a determination that will take into consideration "your income, expenses and asset equity."
Apply for a hardship extension
A hardship determination "occurs when the IRS reviews your financial situation and determines that a taxpayer cannot pay anything toward the back taxes at this time because their expenses exceed their income and they have no assets from which to borrow against or liquidate," said U.S. News & World Report, citing Michael Raanan, an enrolled agent and the president of IRSvideos.com.
The benefit here is that the IRS "will temporarily stop collection activities," said CBS News. Still, "interest and penalties continue to accrue on the tax debt, and "the IRS reviews your financial situation periodically" while you are in this program.
Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.
-
Why is this government shutdown so consequential?
Today's Big Question Federal employee layoffs could be in the thousands
-
Lavender marriage grows in generational appeal
In the spotlight Millennials and Gen Z are embracing these unions to combat financial uncertainty and the rollback of LGBTQ+ rights
-
The 5 best zombie TV shows of all time
The Week Recommends For undead aficionados, the age of abundance has truly arrived
-
How will Fed rate cuts affect the housing market?
the explainer An anticipated series of Federal Reserve cuts could impact mortgage rates
-
What to know about investing in ETFs
The Explainer Exchange-traded funds can be a great choice for beginners
-
How to ditch ‘buy now, pay later’ debt
the explainer Recent changes mean BNPL will soon affect your credit score
-
The biggest changes to Social Security coming in 2026
The Explainer They will include an annual cost of living adjustment and a higher wage cap
-
Is duty-free shopping worth it?
the explainer How to determine whether you are actually getting a good deal
-
What's a bridge loan and how could it make buying your next home possible?
The Explainer This type of loan has both pros and cons
-
What the 2025 Autumn Budget could mean for your wallet
The Explainer Chancellor Rachel Reeves will reveal her latest plan to balance the nation’s finances in November
-
How to put student loan payments on pause
The Explainer If you are starting to worry about missing payments, deferment and forbearance can help