The IRS begins assessing interest and penalties right after the April 15 deadline, so ignoring your tax bill is a costly mistake.
Nearly a quarter (23%) of people who owe money to the IRS said they’ll go into debt to pay if off, according to a 2024 survey from Intuit Credit Karma.
If you don’t have cash on hand to settle your tax liability, you have some options.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
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Enroll in an IRS payment plan
The IRS has both short-term and long-term installment plans to help taxpayers square their accounts. You’ll still have to pay some interest and penalties, but you'll avoid more serious consequences.
If you’re facing major financial hardship, you can try applying for an offer in compromise (OIC), which allows you to settle your bill for less than the amount owed, either in a lump sum within five months or in installments over 24 months.
The IRS only accepts about a third of OIC requests, however.
Pay with a credit card
Paying your taxes with a credit card will also avoid IRS penalties, but you'll be charged a processing fee of either 1.75% or 1.85%, depending on which processing company you use. And, if your card has a high APR, you could be trading one mounting debt for another.
One option is applying for a card with a 0% APR introductory offer. The Wells Fargo Reflect® Card has an introductory 0% APR on purchases and qualifying balance transfers for 21 months from account opening (17.49%, 23.99%, or 28.24% variable APR thereafter). So, you'd have almost two years to pay off your bill before interest kicked in.
Balance transfers made within 120 days qualify for the intro rate and come with a 5% transfer fee and a minimum transfer of $5.
The Wells Fargo Reflect® Card can help you save on interest charges thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.49%, 23.99%, or 28.24% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
5%, min: $5
Foreign transaction fee
3%
Pay with a personal loan
Don't think you can get approved for a 0% APR credit card? It might be easier to score a personal loan.
With loans ranging from $2,000 to $35,000, Avant considers borrowers with credit scores below 600. The online platform offers terms of 24 to 60 months, depending on your application, loan size, interest rate and monthly payment.
Avant Personal Loans
Annual Percentage Rate (APR)
9.95% to 35.99%
Loan purpose
Debt consolidation, major expenses, emergency costs, home improvements
Loan amounts
$2,000 to $35,000
Terms
24 to 60 months
Credit needed
Poor/Fair
Origination fee
Administration fee up to 9.99%
Early payoff penalty
None
Late fee
Up to $25 per late payment after 10-day grace period
Terms apply.
Click here to see if you prequalify for a personal loan offer.
Compare rates and fees with what you would pay in an IRS installment plan, accounting for how long it will take to pay off the loan.
Sign up with a tax relief company
Tax relief companies can reach out to the IRS or your state revenue department on your behalf. Depending on your situation, they may:
- Petition for an installment plan to pay your taxes over time
- Submit an Offer in Compromise (OIC) to settle for less than the total owed
- Request "Currently Not Collectible" status if you're facing a financial crisis
- Ask for a penalty abatement to remove or reduce liens, garnishments and other hardships
- Request innocent spouse relief if your tax liability is due to your partner's actions
You can do most of these on your own for free, but the process can be long and confusing.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Anthem Tax Services is licensed in all 50 states and requires clients to have $10,000 in tax debt to enroll. It advertises a money-back guarantee if it doesn't save you money or rework your payment schedule.
Alleviate Tax Relief offers services in all 50 states and only requires clients have $7,500 in tax debt. It has both a lowest-price guarantee and a 30-day money-back guarantee. Money-back and lowest-price guarantees apply to tax resolution services only and cannot be applied to any other services offered by Alleviate Tax Relief.
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