Tax Resources
 

Cannot Pay My Federal Income Taxes

It is not uncommon. There are a lot of people who cannot pay their federal income taxes. It is not the end of the world. The IRS has options for taxpayers who cannot afford to pay their federal income taxes all at once.

What if I cannot pay my federal income taxes?

If a taxpayer cannot pay the full amount owed to the IRS by the time his or her tax return is filed, then the IRS has a payment plan for your. You can apply to pay by installments and receive 60 months to pay your taxes. However, the more taxes you owe and have not paid, the more penalties, interests, and fees the IRS will add to your tax bills. You can apply to pay by installments using the IRS tax form 9465. Once applied, the IRS should respond within 30 days if you file your tax return by March 31. After that, the IRS will be busy with other tax returns and may take longer to get back with you.

Cannot Pay My Federal Income Taxes

Will I owe the IRS penalties?

A taxpayer may owe the IRS penalties if:

  • the amount you owe the IRS as shown on your 1040A or 1040 tax forms is:
    • at least $1,000 and
    • more than 10% of the tax shown on your tax return which is the total tax less the total amounts of earned income credit or additional child tax credit as well as other adjustments as indicated on the tax forms.

OR

  • you did not pay enough estimated tax by any of the due dates
Exceptions to IRS penalties

A taxpayer does not have to pay the IRS penalty if the previous year's tax return was for the whole year either:

  • shows no tax on the previous year's return and the taxpayer was a US citizen or resident for the full year, or
  • the federal income tax withheld or otherwise (see tax forms instructions) is 100% of the tax shown in the previous year.

Tax Questions