More people have complained during this tax season that they are facing a bill when they did not expect one. For some people, that means being forced to come up with money they may not have.
While the Internal Revenue Service reports the average refund is currently larger than it was in 2018, the agency also says more than five million taxpayers find themselves owing more money than they have available.
Certified Public Accountant Bob Martin says some payment options are certainly better than others.
Using a credit card is one of the most expensive ways to pay a tax bill, because high interest rates and service fees of up to 2 percent adds a lot of additional expense.
"It's not dollar for dollar when you pay with your credit card," explains Martin, "You're also going to pay a convenience fee on top of the taxes that come out of the amount."
Consumer Reports suggests another option for homeowners with a tax bill is a home equity line of credit. The interest rate is less than a credit card, there's no service charge, and payment plans are easier. However, borrowing against your home raises the of lost value if you fall behind.
The most common and easiest payment option is an installment plan from the IRS using Form 9465. Installment plans are frequently granted and provide up to 72 months to make payments, in extreme cases.
For relatively small amounts that will paid off quickly, "Basically, it's no questions asked," adds Martin. "You will be charged interest, and possibly a penalty, but it's a very easy way that they will approve."
Whichever option, Martin encourages people to be proactive about their debts because "inaction" only becomes more expensive as penalties stack up.
To help avoid unexpected tax bills in the future it may be a good idea to adjust withholdings from your paycheck.