Can't pay your taxes? Here are your options

While many Americans received a tax refund, the percentage who will owe the IRS has been steadily rising, according to consumer analytics platform Civic Science, edging up from 39% in 2021 to 43% in 2023.

Not paying your tax bill could result in the government garnishing your wages, placing a lien on your property or even revoking your passport.

If you can't afford to pay your tax bill you have several options, including IRS-sponsored plans, personal loans and tax relief companies.

If you don't have the cash right away, the IRS has installment plans that can help. There's no getting around interest and penalties, but you'll avoid more severe consequences.

The IRS's short-term payment plan gives taxpayers up to 180 days to settle their debt. It does carry a failure-to-pay penalty of 0.5% a month and interest will accrue on what you owe until the balance reaches 25% of the total due.

You can still get on a payment plan if you won't have the funds within six months, but there are additional fees. And, as with a short-term plan, you'll be hit with a 0.5% failure-to-pay penalty.

If you register for automatic monthly withdrawals online, there is a $31 set-up fee. If you set up direct debit over the phone, through the mail or in person, however, the fee is $107. You can opt to make regular payments yourself, but the fee is $130 if you register online or $235 over the phone, through the mail or in person.

With a long-term payment plan, you can typically set how much your monthly payment is but you must choose an amount that enables you to clear your debt in 72 months.

You can also apply to the IRS for an offer in compromise (OIC), a request to settle your tax bill for less than the full amount owed. The agency considers your income, expenses and ability to pay, among other factors, and approvals are rare: According to the most recent data from the IRS, only about a third of the 36,000 OICs submitted in 2022 were accepted.

Paying your taxes with a credit card sidesteps penalties and interest from the IRS, but could open you up to a higher APR and put you even deeper in debt. One option is applying for a credit card with a 0% APR introductory offer. This strategy is only advisable if you can pay off the balance before the introductory period expires. Otherwise, you'll be hit with hefty interest payments.

The Wells Fargo Reflect® Card has an introductory 0% APR offer on both purchases and balance transfers from account opening that lasts 21 months (17.49%, 23.99%, or 29.24% variable APR thereafter), giving qualified users nearly two years to pay off their tax bill interest-free. The balance transfer fee is 5%, min: $5

The Amex EveryDay® Credit Card's 0% intro APR rate on purchases and balance transfers lasts for only 15 months (then 18.24% to 29.24%) but cardholders get a welcome bonus of 10,000 points if they spend $2,000 in the first six months after opening the card.

If you pay by credit card, the IRS does charge a service fee that varies by card type and payment amount.

If you don't have great credit, a personal loan may be easier to get approval for than a 0% APR credit card. Before you apply, however, compare rates and fees with what you would pay through an IRS installment plan. (Be sure to consider how long it will take to settle your tax bill.)

Avant Personal Loans is a great option if you have poor credit, since it accepts borrowers with credit scores as low as 580. Loans are capped at $35,000 and you'll have 12 to 60 months to repay the loan with an APR that ranges from 9.95% to 35.99%.

You only need a credit score of 300 to be considered for a loan by Upstart. The online lending platform offers loans of up to $50,000, with repayment terms of between 36 and 60 months.

While the Federal Trade Commission recommends working with the IRS directly, you may feel overwhelmed or confused. Tax relief companies work with the IRS or your state revenue department to reduce or eliminate your tax debt, arrange installment plans and stop garnishments and liens.

Community Tax offer a free initial consultation and charges an average of $295 for the investigation phase, the lowest among the tax relief companies we've reviewed. You do need to have at least $7,500 in tax debt and it doesn't operate in Minnesota or North Dakota.

Precision Tax Relief requires clients to have a tax debt of at least $10,000, but it has a 94% success rate with offers in compromise. It received an A+ rating from the Better Business Bureau and offers a free 30-day money-back guarantee.

If you own your residence, you can leverage your home equity to get cash with a home equity line of credit (HELOC). The interest rate on a HELOC loans is usually lower than a credit card or personal loan. But they typically start at $10,000, so only consider a HELOC loan if your tax bill is at least five figures.

Fairway Independent Mortgage Corporation ranked number one in JD Power's mortgage origination satisfaction study in 2023 and claims it can provide funding in as little as five days.

PNC combines low rates, flexible requirements and great customer service. There is a low $100 minimum draw and, unlike most lenders, it will let you switch between a variable rate and a fixed rate after withdrawing your funds.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every tax article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of tax products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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For rates and fees of the Amex EveryDay® Credit Card, click here.