For most of us, doing the income tax return is a major project. The laws are confusing and they keep changing all the time.
During a TODAY Money web chat on Wednesday, Mark Steber, Chief Tax Officer with Jackson Hewitt Tax Service, answered a variety of tax questions.
Here's one that may affect you or someone in your family:
Andrew: I owe the IRS over $2,500 this year. And I simply don’t have the money. What should I do? File an extension? Ask for a payment plan? My wife and I are freaking out. Help!
Mark Steber: First, don’t freak out. There are many like you and much help is available. Second, do not simply file for an extension, as would not likely be valid with such a balance due. The extension would be invalid and the tax return late in addition to underpaid.
Having said all of that, there are options as you note. The IRS offers a pretty good payment plan option. The plan allows up to 72 months to pay your taxes. There is a fee of $105, $52 if you agree to electronic debit of your monthly payment.
Other considerations – as we noted earlier – include possibly using a credit card for short term financing.
Read the full Q & A below: