What if I’m late? Payment plans

Your choices

Three options for payment plans.

1

Set it up online now.

The fastest route: go straight to the official portal and request a plan yourself. Pick the one that matches the bill — or do both if you owe federal and state.

California FTB — Set up a plan ↗ IRS — Set up a plan ↗

2

Wait for their request.

Once you submit your return and the tax authority sees that you owe, they’ll send you a letter stating the balance and offering you the chance to set up a payment plan — by phone or by mailing in the appropriate form.

UpsideIt buys you a little time before the first payment is due.

Trade-offYou’ll pay a small amount of additional penalties and interest for the time the balance sat unpaid.

3

Know this about payment plans.

Whichever way you set it up, a few things are worth understanding going in:

Plans are paid by automatic bank draft.
If you miss a payment, you can be kicked out of the plan — and you may not be able to get back in. Make sure the money is in your account when a payment comes due.
Plans typically run 2 years. If you need to, they’ll usually let you stretch to 4 years.

Quick way to estimate your monthly payment

Take the whole bill and divide it by the number of months:

Total bill ÷ 24 = a 2-year payment

Example: a $5,000 tax bill ÷ 24 = about $208/mo (plus penalties & interest)

Total bill ÷ 48 = a 4-year payment

Example: a $15,000 tax bill ÷ 48 = about $312/mo (plus penalties & interest)

There’ll be a small amount of penalties and interest on top, but this gets you very close.

Links go to official U.S. government (.gov) sites. The Harvest Plan is an independent firm, not affiliated with or endorsed by the IRS or any state tax agency. This page is general information, not advice for your specific situation — talk to us about your return.

Want us to handle it with you?

We encourage taxpayers who have the time and are short on dollars to handle this on their own — that’s the purpose of this page: to give guidance to people who are already a little short these days. But we’re always happy to assist you in these or any other matters at our regular consulting fee.

If you’d like a quick consult, schedule an appointment here for a 15-minute consultation.
If your problem is larger than a small amount owed and you need tax mitigation and resolution support, click here.

Important Final Thoughts

What you need to know.

If you can’t pay your full tax bill, the most important thing is still to file your return on time — filing late and paying late are two separate penalties, and you don’t want both. Once the return is filed, you have a few ways to handle the balance. A payment plan (the IRS calls it an “installment agreement”) lets you pay what you owe in monthly amounts instead of all at once.

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Payment plans exist for both the IRS (federal) and the California Franchise Tax Board (state) — handle them separately.
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You can set a plan up yourself online, or let the tax authority mail you the offer — both are explained in the options above.
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Interest and a small penalty keep running until the balance is paid, so the sooner you start, the less it costs.
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Not sure which path fits your situation? Ask us first — we do this all the time.