Facing the July 15th Tax Day With Confidence

“Out of sight, out of mind…” which is how you may have felt when the annual income tax filing date was shifted to July if you have a payment to make. But July 15th is coming up fast and even if you felt relatively sanguine about making the payment a couple of months ago, your situation may have changed since then. The good news is that it is quite easy to arrange to pay your tax bill over time, and not very expensive to do so.


First and foremost, regardless of your ability to pay on July 15, you must file your return by that date or you will face a penalty for failure to file. If you cannot make a payment at that time, you can request a payment plan that will allow you to pay the amount owed later, in installments if necessary. By entering into a payment plan, you avoid any penalty for non-payment of your taxes. (You will be assessed interest.)

You have two payment plan options:

  • Short Term Payment Plan. Under this plan, you will pay the amount owed, with interest, within 120 days. You can apply for this plan online here and there is no fee for setting up this plan.
  • Long Term Payment Plan. This is also referred to as an Installment Agreement. This is the appropriate option if you cannot pay the amount owed within 120 days. Under an Installment Agreement, you make monthly payments as agreed to with the IRS. There is a $31 fee to set up the plan online here, although this can be waived for low-income taxpayers. (The fee is much higher if you set up the plan by phone, mail, or in-person.) The IRS will let you know, usually within 30 days, if your request is accepted and what the payment will be. You can make payments by direct debit from your bank account.


As of June 2020, the interest rate charged by the IRS under its payment plans is 5%. If you are struggling to pay your tax bill, this is clearly a lower-cost option than most other alternatives (such as putting your tax payment on your credit card).


If July 15th is striking a chord of terror for you, know that there are good options out there to ease the burden. As long as you are proactive — filing your return on time, making an arrangement to pay what you owe over time — you will not face any penalties or have negative information reported to the credit bureaus. Face tax day without fear!

Leave a Reply

Your email address will not be published. Required fields are marked *