Posted on February 25, 2026
Americans work hard. We grind, day in and day out, developing our skills and maturing within our chosen careers. In a world of unpredictable inflation and soaring cost of living expenses, we know all too well that nothing in life is free. But it is easy to forget that this saying also applies to your pay.
Whether a self-employed entrepreneur or a wheel in the corporate machine, being blindsided by Uncle Sam with an unexpected tax bill is just one of those life events that occur. Some individuals are prepared for these life hiccups, while others have to sweat it out and devise a strategy. Here are a few ideas to help manage that unexpected tax bill this year.
1. Set up an installment plan.
Depending on your tax situation, you are eligible for several payment options. If you can’t afford to pay in full, pay as much as possible and attach Form 9465 (Installment Agreement Request) to the front of your tax return. According to the IRS, several options include, if you can’t pay in full, a short-term payment plan (paying in 180 days or less) or a long-term payment plan (installment agreement, paying monthly).
To qualify, you must meet these requirements:
- You can apply for a short-term payment plan if you owe less than $100,000 in combined tax, penalties, and interest.
- If you owe $50,000 (businesses up to $25,000) or less in combined tax, penalties, and interest and have filed all required returns, and have no prior defaults, you can apply for a long-term payment plan.
2. Claim hardship to delay your payment.
If you are having a tough year, you can prove your tax hardship to the IRS for some much-needed relief. You are required to submit details of your financial situation and hardship to the government in a “hardship request” using IRS Form 433A/433F (for individuals or self-employed) or Form 433B (for qualifying partnerships or corporations).
Generally, eligibility requirements are as follows:
- An annual income of less than $84,000.
- Low funds in your bank account after paying off basic living expenses.
- Housing and utilities
- Food, clothing, personal care and housekeeping products
- Transportation
- Out-of-pocket healthcare expenses
3. Borrow money.
This strategy is a last resort. If you can avoid it, don’t borrow money unless from a trusted friend or family member. However, taking out a high-interest personal loan can create more problems than just owing the IRS money. Debt, particularly high-interest loans, is notoriously difficult to pay back, and if you owe a substantial amount, it could take years. Hard credit checks, late or missed payments and credit utilization all impact your fragile credit score. Safeguarding your credit score is one of the most financially astute moves you can make. All the same, the option to borrow money responsibly does exist.
4. Apply for a postponement to pay due to a natural disaster.
If you happen to reside in an area devastated by a natural disaster, for example, taxpayers who reside or have a business in a disaster area with deadlines that fall on or after Oct. 8, 2025, and before May 1, 2026, are granted additional time to file.
5. Use your emergency fund.
When you think of an emergency, you probably imagine a hole in the roof, or a sudden medical issue, and the procedure is with an out-of-network doctor and only partially covered by insurance. When dealing with a debt like an unexpected tax bill, you might not consider your emergency fund. However, an emergency fund can be a great option to relieve the stress of this payment.
6. Consult your financial professional.
Consider consulting a financial professional to learn what strategies for paying your taxes would work for you and your financial goals.
In the meantime, take charge of your tax planning with our comprehensive checklist. Use the checklist as a guide to help you get a clear roadmap for navigating tax season this year. Access the tax planning checklist here.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
All information is believed to be from reliable sources; however, LPL Enterprise makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions
LPLE Tracking #837381