Four Days to Oct. 15 and No Money for the Bill? The Two IRS Doors Most Filers Never Try (Oct. 11, 2026)

It’s Sunday, October 11. If you received an extension to file your 2025 federal return, the deadline is Thursday, October 15. And if you’ve worked out the return but don’t have enough cash to pay the balance right now, take a breath: filing and paying are two different steps, and there are options for the second one.

The practical move is usually to file by the deadline anyway, then make a plan for the balance. Here are two IRS options many filers overlook, plus a newer penalty-relief process worth knowing about.

Door No. 1: File on time, even if you can’t pay in full

An extension gives you more time to file; it does not extend the time to pay. For most filers, the 2025 tax bill was due in April. If you still owe, interest and possibly a late-payment penalty can continue to add up.

But avoiding the return altogether can make things worse. The IRS’s failure-to-file penalty is generally 5% of unpaid tax for each month, or part of a month, the return is late, up to 25%. The failure-to-pay penalty is generally 0.5% of unpaid tax per month, also subject to rules and limits. In other words, the monthly failure-to-file rate is usually much larger. When both penalties apply, the failure-to-file penalty is reduced by the failure-to-pay penalty for the overlapping period.

So, if you can file but can’t pay the whole amount, file the return by October 15 and pay what you can. Even a partial payment can reduce the amount on which interest and penalties are calculated. The IRS explains the failure-to-file penalty and the failure-to-pay penalty.

Door No. 2: Ask the IRS to spread payments out

An IRS installment agreement lets eligible taxpayers pay a balance over time. The right route depends on how much you owe, how quickly you can pay, and whether you’ve filed all required returns. Check the IRS payment plans and installment agreements page for current eligibility and details.

If you can pay within 180 days, an individual may qualify for a short-term payment plan. There is no setup fee for that plan, though interest and applicable penalties generally continue until the balance is paid.

If you need monthly payments for longer, you may be able to request a long-term plan. Individuals who qualify can generally apply online through the IRS Online Payment Agreement process. If you can set up automatic withdrawals from your bank account: a Direct Debit Installment Agreement, or DDIA. The current setup fee is $29 online, compared with $107 for a direct-debit agreement requested by phone, mail, or in person.

A long-term plan without automatic bank withdrawals has different fees: currently $69 online or $178 by phone, mail, or in person. These fees are separate from interest and any applicable penalties, which may continue while you pay.

If you prefer paper or can’t use the online process, Form 9465, Installment Agreement Request, is the paper application. But for many filers, applying online for a direct-debit plan costs less than applying by paper. The IRS says some individuals who meet its low-income criteria, generally at or below 250% of the federal poverty level, can already have the fee waived for a direct-debit plan.

A newer possibility: Automatic Exemption from Penalty

Since summer 2026, the IRS has been introducing its Automatic Exemption from Penalty (AEP) process. Eligible taxpayers with a timely filing and payment history for the prior three years, or 12 consecutive quarters for quarterly filers, may automatically receive relief from certain failure-to-file, failure-to-pay, and failure-to-deposit penalties on eligible original returns.

If you qualify, you don’t need to apply. The IRS says it applies AEP when the original return finishes processing and sends a notice if the relief is granted. Eligibility depends on the return type and compliance record, so the three-year or 12-quarter history is a starting point, not a promise that every penalty disappears.

AEP does not erase the tax you owe or the interest on it. If you don’t qualify, you can still ask the IRS to consider penalty relief based on reasonable cause. The IRS reviews those requests based on the circumstances; relief isn’t automatic or guaranteed. Its administrative penalty relief page, AEP announcement, and eligibility overview explain the rules.

About the Senate bill and installment fees

On September 30, the Senate passed an amended version of H.R. 5349, the Taxpayer Assistance and Service Act. The Senate-passed text proposes eliminating installment-agreement setup fees for certain individuals with adjusted gross income at or below 250% of the federal poverty level.

That proposal is not law yet. It still needs House approval and must be enacted before it changes the rules. The Senate-passed text also says the proposed fee change would take effect 12 months after enactment. Don’t wait for it to become law before exploring your options: a fee waiver for qualifying low-income taxpayers who use a direct-debit agreement already exists today. You can review the Senate-passed bill text and the IRS’s current payment-plan fees.

Two more October 15 reminders

Self-employed filers may have retirement-plan contributions to consider, too. For an eligible 2025 SEP, contributions can generally be made by the tax return due date, including extensions. Solo 401(k) rules are more particular: employer contributions may generally have an extended deadline, but employee elective deferrals have separate election and plan-establishment rules. October 15 is not automatically a new deadline for every kind of Solo 401(k) contribution. Check the details for your plan and circumstances in IRS Publication 560, or with a qualified tax professional.

And if you expect a 2025 refund, don’t put off filing. There is generally a three-year window to claim a refund, but October 15 is the extended filing deadline, not the point at which a 2025 refund claim generally expires. Filing now can put the return on record and help you claim any refund you’re due. For general timing, see the IRS’s refund claim guidance.

Have these items ready

Before preparing the return or discussing a payment plan, gather:

• Your prior-year return

• Your 2025 W-2s, 1099s, and other income records

• Any IRS notice or balance-due letter

• Your bank routing and account information, if considering direct debit

Make-A-Move Enterprise can prepare and file your return and help assemble documents for a payment-plan discussion. That can make the next step less of a paperwork scavenger hunt. We don’t provide legal or tax advice about what a specific person should do; if you need advice tailored to your circumstances, speak with a qualified tax professional.

Planning for a dream home, and your family

A filed return and a workable payment plan can help keep mortgage pre-approval paperwork moving. Lenders may review tax returns, transcripts, and tax debts during underwriting, so an unfiled return or unresolved IRS balance can prompt questions. Getting organized early won’t guarantee loan approval, but it may help avoid a last-minute paperwork snag on the way to your dream home. For more on tax documents and mortgage preparation, see Make-A-Move Enterprise’s guide to the IRS Tax Compliance Report.

One other bit of household planning: a modest term life insurance policy may cost less per month than the interest on a sizable forgotten tax balance for some people. They address different risks, of course. Life insurance can help protect loved ones, but it doesn’t pay your IRS bill. Comparing costs and reviewing coverage can be worthwhile as part of a broader family budget.

Four days is enough time to take a clear first step: file the return, pay what you reasonably can, and check which payment option may fit. Which part feels like the biggest hurdle for you: the paperwork, figuring out the balance, or choosing a payment approach?

Disclaimer: Make-A-Move Enterprise, LLC is not a law firm, does not provide legal advice, and its team consists of non-lawyers. Make-A-Move Enterprise provides reliable clerical, research, and administrative procedures to support legal work, including outsourcing/paralegal support services for firms as needed.

Book an appointment online: https://calendly.com/makeamoveenterprise/60min or call us 24/7 at 561-335-0716 to schedule with a live representative.