If you can't pay your tax balance by the Oct. 15 deadline, here's what to do.

• If you can't pay your tax balance by Oct. 15, experts suggest you have choices.
• An IRS payment plan, or "installment agreement," allows you to pay your taxes in installments over time.
• An installment agreement could potentially reduce the failure-to-pay penalty, but you will still incur interest and late payment fees.

If you can't pay your tax balance by Oct. 15, experts suggest you have choices.

Those facing difficulty in meeting the federal tax deadline of April 15 could apply for a six-month extension by submitting Form 4868.

Although the tax extension granted more time to submit, 2023 taxes were still due on April 15. Meanwhile, unpaid taxes accumulate IRS penalties and interest.

A lot of people were surprised when Josh Youngblood, an enrolled agent and owner of The Youngblood Group, a Dallas-based tax firm, made the statement.

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If you missed the tax deadline, you will be charged a late payment penalty of 0.5% of your unpaid balance per month or partial month, capped at 25%, in addition to interest on unpaid taxes.

The penalty for not submitting a failure to file notice is 5% of unpaid taxes per month or a portion of the month, up to 25%.

Some taxpayers in disaster areas receive both an automatic extension to file and more time to pay.

File your return even if you can't pay

If you can't pay your taxes, the IRS offers options, but you must remain current with your filing requirements, according to Tom O'Saben, an enrolled agent and director of tax content and government relations at the National Association of Tax Professionals.

Filers can receive an immediate acceptance or rejection of payment plan requests online, with various payment options available, according to the IRS.

Establishing a payment plan with the IRS is almost automatic if you owe less than $50,000, according to O'Saben.

IRS online payment plans, or "installment agreements," include:

• An 180-day payment plan may be available if your debt is less than $100,000 after taxes, penalties, and interest are factored in.

• If your balance is less than $50,000 including tax, penalties and interest, you may be eligible for a long-term payment plan. You will need to pay monthly, and you have up to 72 months to pay off the balance in full.

An IRS payment plan could reduce your late-payment fee by half while the penalty and interest continue to accumulate, as per the IRS.

O'Saben stated that one disadvantage of IRS payment plans is that future tax refunds could be applied towards your outstanding balance.

'Don't ignore it'

Experts advise that if you have unpaid taxes, you can anticipate notices from the IRS, and it is crucial to communicate with the agency.

"Youngblood advised against ignoring IRS letters because they won't disappear."

"The IRS is not as bad as people think; they actually want to collaborate with individuals."