What If I Can’t Afford to Pay My Taxes?

If you’ve finished your tax return and realized you owe more than you can pay, take a breath.

You’re not alone and you’re not out of options.

Every year, millions of people find themselves in this exact spot. The good news? The Internal Revenue Service has multiple ways to work with taxpayers who can’t pay in full right away. The worst thing you can do is panic or ignore it.

Let’s walk through your choices and options…

First Things First: Still File Your Return

Even if you can’t pay, file your tax return on time or file an extension

Why this matters:

• Failure-to-file penalties are much higher than failure-to-pay penalties
• Filing keeps you eligible for payment plans and relief options
• It shows good-faith effort, which the IRS cares about

You do not need to have the money in hand to file.

Option 1: Pay What You Can Now

If you can afford anything at all, even a small amount, pay it.

Why this helps:

• Interest and penalties apply only to the unpaid balance
• Partial payments reduce long-term costs
• It shows cooperation and responsibility

You can always set up a plan for the rest.

Option 2: Short-Term Payment Plan (Up to 180 Days)

If your situation is temporary, like you are waiting on a bonus, commission, refund, or contract, this may be your easiest solution.

Best for:

• People who can pay in full within 6 months
• Those avoiding monthly payment commitments

No long-term setup, just time to breathe.

Option 3: Long-Term Installment Agreement

This is the most common solution.

You make monthly payments based on what you can realistically afford.

Good to know:

• You don’t need perfect credit
• Payments are structured around your finances
• As long as you make payments, enforcement actions usually stop

This turns a scary tax bill into a predictable monthly expense.

Option 4: Temporary Hardship Status

If paying anything would cause real financial hardship, like to cover rent, food, utilities, the IRS may temporarily pause collections.

This doesn’t erase the debt, but it:

• Stops collection actions for now
• Gives you time to stabilize
• Requires documentation of financial hardship

This option is about survival first, taxes second.

Option 5: Settle for Less

In certain cases, the IRS may accept less than the full amount owed. This option is more complex and eligibility-based, but it exists for people who truly cannot pay the full balance now or in the future.

It’s not automatic and not for everyone, but when it applies, it can be life-changing.

What You Should Not Do

• Ignore the problem
• Avoid filing
• Assume the IRS will “just take everything”
• Let fear stop you from asking for help

Most tax nightmares come from inaction, not from owing money.

A Simple Plan If You’re Feeling Overwhelmed

1. File your return
2. Pay what you can
3. Choose the option that fits your situation
4. Ask for help if you’re unsure

Taxes are financial, not moral. Owing money does not mean you failed.

If you can’t afford to pay your taxes right now, it doesn’t mean you’re irresponsible…it means you’re human. There are structured, legal, and compassionate ways to handle this, and you don’t have to figure it out alone.

Sometimes the most important step is just asking, “What are my options?”

You Don’t Have to Navigate This Alone

Call us at: (818)845-1964 or send us a message through our website at https://www.heytaxman.com/

Disclaimer: This blog is for general informational purposes only and does not constitute tax or legal advice. Tax situations vary, and you should consult a qualified tax professional regarding your specific circumstances.