Tax Day is approaching fast—but for those who can’t pay their full federal tax bill by April 15, the IRS offers several payment plan options to help avoid major penalties and interest.
Why It Matters
The IRS is reminding taxpayers that filing on time—even without full payment—is critical. Missing the deadline could trigger steep penalties, even if you’re only a few days late.
“Filing on time avoids the late filing penalty, which is usually 5% per month on the unpaid balance,” the IRS said in a statement this week.
Additionally, interest (currently 7% per year, compounded daily) and late payment penalties (0.5% per month) continue to grow on any unpaid balance after the April 15 deadline.
Important Tax Dates for 2025
- Tax Day: April 15, 2025
- Who’s exempt: Taxpayers in federally declared disaster areas, combat zones, or those living abroad may have extended deadlines.
- Important: An extension to file does not extend your deadline to pay.
IRS Payment Plan Options
Most taxpayers who owe less than $100,000 qualify for an IRS payment plan. These can be set up quickly and easily online at IRS.gov/OPA.
Short-Term Payment Plan
- Eligibility: Owe less than $100,000 (including tax, penalties, and interest).
- Term: Up to 180 days to pay in full.
- Fees: None, but penalties and interest continue to accrue.
Long-Term Payment Plan (Installment Agreement)
- Eligibility: Owe less than $50,000 total.
- Term: Monthly payments for up to 10 years (the IRS’s collection statute).
- Setup: Best with Direct Debit to avoid missed payments and mailing costs.
- Fees: Setup fees may apply, depending on payment method.
Once approved, there’s no need to call or visit the IRS—everything is handled online.
Other IRS Payment Options
Not everyone qualifies for an online plan. Additional options include:
Offer in Compromise
- Settle tax debt for less than what you owe.
- Use the IRS’s Offer in Compromise Pre-Qualifier Tool on IRS.gov to check eligibility.
Temporary Delay of Collection
- If you’re facing serious financial hardship, you can request a delay.
- The IRS may pause collection, but penalties and interest will continue to grow.
Watch Out for Scams
The IRS never initiates tax collection through:
- Phone calls
- Text messages
- Social media
If you receive one of these, it’s likely a scam. The IRS typically contacts taxpayers by mail first with a bill or notice.
To confirm your tax balance, visit your Individual Online Account at IRS.gov.
Key Takeaways
- You must still pay taxes by April 15, even if you get a filing extension.
- IRS payment plans can help you avoid major penalties and growing interest.
- Online setup is quick, easy, and often avoids the need for paperwork or phone calls.
- Beware of scams—IRS communications almost always start by mail, not by phone.
Stay Informed
Visit IRS.gov for the latest on filing deadlines, payment options, and tools like the Offer in Compromise Pre-Qualifier and Online Payment Agreement. If you’ve received a notice from the IRS, follow the contact instructions listed in your letter for personalized help.
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