What to do if you can't pay your tax bill by April 15

Opening tax software and seeing a balance due you can't cover is a gut punch. Here's what I want you to know before you panic: the absolute worst move you can make is doing nothing. Seriously, almost every other move is better. The IRS has more payment options than most people expect, and the first few steps are the same no matter if the bill is $800 or $28,000.

Want a one-page version to work through as you go? Grab the can't-pay action plan.

Step 1: file on time, even if you can't pay

The IRS charges two separate penalties:

• Failure to file: 5% of the unpaid tax for each month you're late, up to 25%.
• Failure to pay: 0.5% of the unpaid tax for each month, up to 25%.

On a $5,000 balance, that's a $250 penalty for filing a month late compared to $25 for paying a month late. When both apply in the same month, the IRS reduces the filing penalty so the two together come to 5%, so you'd be looking at about $250 total. File on time and only miss the payment, and it's $25. Filing late costs up to 10 times more per month than paying late, so get the return in by April 15 even if your bank account can't keep up.

Step 2: know what an extension does and doesn't do

An extension (Form 4868) gives you until October 15 to file. It does not give you more time to pay. The tax is still due April 15, and interest and the payment penalty start on the unpaid amount right away. An extension is still worth submitting if your paperwork isn't ready, because it protects you from the bigger filing penalty. Send in whatever you can with it.

Step 3: pay what you can now

Every dollar you pay by April 15 is a dollar that stops collecting penalties and interest. Even partial payment helps. You can pay through IRS Direct Pay straight from your bank account at no cost.

Be careful about charging your tax bill to a credit card. The IRS sets its interest rate every quarter, and it's typically well below what most cards charge. Check the current rate on IRS.gov before you decide.

Step 4: pick a payment plan

If you can't pay the full amount, ask for a plan. Many people who owe $50,000 or less can set one up online in a single sitting.

While you're in a long-term plan, the failure-to-pay penalty drops from 0.5% to 0.25% per month. Interest keeps running. To qualify, you'll need to have filed all your required returns, and you'll need to stay current on future taxes. If you miss a payment or skip next year's bill, the plan can default.

Businesses have their own limits. A simple plan generally works for balances up to $25,000 if payroll taxes are involved, and up to $50,000 if they aren't.

Step 5: don't forget Virginia

The IRS and Virginia Tax are two separate agencies with two separate deadlines. Virginia's individual filing and payment deadline is May 1 (or the next business day when it falls on a weekend). Virginia also offers an automatic six-month extension to file, but the same rule applies: the tax itself is still due at the deadline. If you can't pay, Virginia Tax has payment plans you can request through your online account. Treat the state bill with the same seriousness as the federal one.

Step 6: ask for penalty relief

If you've filed and paid on time for the past three years, you may qualify for first-time penalty abatement, which can remove failure-to-file and failure-to-pay penalties. If something out of your control caused the problem, like a serious illness or a natural disaster, you can ask for relief based on reasonable cause. Neither one is automatic. You have to ask, and you'll want your paperwork in order when you do.

When a payment plan doesn't fit

Some situations need heavier options: an offer in compromise (settling for less than you owe), a request to be put in currently not collectible status, or an extension of time to pay for undue hardship. These come with detailed financial disclosures and strict rules. This is where working with an Enrolled Agent, the IRS's highest credential for tax practitioners, is worth it, because an EA can represent you directly with the IRS.

What not to do

• Don't ignore the letters. IRS notices escalate the longer they go unanswered, and the later stages include liens and levies.
• Don't skip filing. A late return costs far more than a late payment.
• Don't cash out retirement funds without running the math. Early withdrawals can add a 10% penalty plus income tax.
• Don't pay a "tax debt relief" company that promises to settle for pennies. Everything they do, you or your EA can do directly with the IRS.

If you own a business

A bill you can't pay often means the planning happened after the year ended. Payroll taxes are the most serious category because they involve money you held for employees, so stay current on those first. Then look at how much you should be setting aside from each deposit so next April doesn't look the same. If you want this year to go differently, an End-of-Year Planning Session projects your 2026 bill while there's still time to change it.

Keep reading

• Standard vs. itemized deduction: how to tell which method saves you more: run your numbers before year-end so April holds fewer surprises.
• PTO policy basics: what small businesses get wrong.

Owe more than you can pay?

That's a good time for a Vibe Check. We'll look at what you owe, what your options are, and what to do first, with no judgment. As an Enrolled Agent, Joa holds the highest credential the IRS grants to tax practitioners, which means she can represent you directly before the IRS. Schedule yours here.

This post is for general informational purposes and doesn't constitute tax or legal advice. Penalty rates, fees, and payment plan rules change, and your situation may qualify for different options. Talk to a tax professional before you decide how to handle a balance due.