The tax extension deadline has arrived and there are alternatives in case you still can’t pay your balance, tax consultants say.

About 19 million U.S. taxpayers filed for an extension by the April 15 tax deadline, which bumped the submitting due date to Oct. 15. However taxpayers affected by natural disasters might have much more time, with new deadlines ranging between Nov. 1 and as late as Could 1, 2025, depending on location.

Nonetheless, for federally declared disasters after April 15, filers weren’t granted extra time to pay their tax invoice. Penalties and curiosity on unpaid balances began accruing after the April 15 deadline.

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Many taxpayers wrongly assume {that a} tax extension gives extra time to pay, consultants say.

“That is a shock to lots of people,” stated Josh Youngblood, an enrolled agent and proprietor of The Youngblood Group, a Dallas-based tax agency. 

When you missed the tax deadline, the late payment penalty is 0.5% of your unpaid steadiness per thirty days or partial month, capped at 25%. Additionally, you will incur interest on unpaid taxes.

By comparability, the failure-to-file penalty is 5% of unpaid taxes per thirty days or partial month, as much as 25%.

After submitting, there are “various payment options” on-line, and lots of filers will obtain a right away acceptance or rejection of cost plan requests with out calling the IRS, in response to the company.

“When you owe lower than $50,000, establishing a cost plan with the IRS is sort of going to be automated,” O’Saben stated.

IRS on-line cost plans, or “installment agreements,” embody:

• Quick-term cost plan: This can be an choice in case you owe lower than $100,000, together with tax, penalties and curiosity. You may have as much as 180 days to pay in full.
• Lengthy-term cost plan: This can be obtainable in case your steadiness is lower than $50,000, together with tax, penalties and curiosity. You will need to pay month-to-month, and you’ve got as much as 72 months to repay the steadiness.

Though the late-payment penalty and curiosity will proceed to accrue, an IRS cost plan may cut your late-payment fee in half whereas the settlement is in impact, in response to the IRS.

One draw back of IRS cost plans is future tax refunds could possibly be used to offset your unpaid steadiness, O’Saben stated.