9 Things to Avoid Doing If You Think You Owe Taxes

Millions of people will not owe additional taxes when they file a return. Instead, many can look forward to receiving a refund from the U.S. government.

However, others will indeed have to make an additional payment to Uncle Sam.

If you think you’re going to owe the IRS money this tax season, don’t compound the problem. Instead, take the right steps to avoid wasting money. Here are nine things you shouldn’t do if you think you’re going to owe taxes when filing a return.

Getting ahead of things by filing early can seem like a wise move. But if you start too soon, you run the risk of filing before all necessary tax paperwork — such as W-2 and 1099 forms — has arrived in your mailbox.

Filing without the proper information is a recipe for financial confusion. So, wait until you’re sure you have all the information you need.

Filing too early can lead to costly mistakes, but waiting until after April 15 to file and pay your taxes can be even worse. Filing late can result in you owing penalties to the IRS.

If you file and pay late, the IRS will send you a letter notifying you of the size of your penalty — and any associated interest — that you’ll need to pay. You can avoid all of this by filing on time.

If you don’t think you can complete your return before the tax-filing deadline, you can always apply for an extension.

While the extension doesn’t apply to paying any taxes you owe — they are still due by April 15 — it does give you up to six months to assemble your documents and file the correct paperwork without incurring a failure-to-file fee.

Paying all your overdue taxes in a lump sum can be financially challenging. Fortunately, the IRS offers payment plans that let you pay the taxes you owe over a period of up to 72 months.

As long as you owe less than $50,000 in total, you can apply for a payment plan online. Note that you’ll continue to accrue interest on the taxes you owe as well as on any penalties or fees. So, it’s a good idea to pay your taxes as soon as you can.

Filing taxes when you know you’ll owe money is scary, but failing to file tax paperwork just because you’ll owe money has scarier financial consequences.

Most people need to file a tax return if they have earned money over the course of the year. Failing to do so now simply means you will end up paying what you owe — plus penalties and interest — later.

Also, if you failed to file during any previous tax years, fixing the problem as soon as possible is in your best interest.

If you notice an error on your tax paperwork after you file — including mistakes on tax returns from years in the past — don’t cross your fingers and hope the IRS doesn’t catch the mistake.

Instead, file an amended return. You might end up owing back taxes, but the earlier you discover and amend the mistake, the less money you’ll have to pay to the IRS.

While the IRS does occasionally forgive unpaid back taxes, asking the agency to forgive your debt is a complicated process that requires a lot of paperwork.

While it’s worth exploring debt forgiveness options if your overdue taxes are ruining your finances, you shouldn’t expect the IRS to forgive the taxes you owe without a lot of effort on your part.

If you’re self-employed, you’re typically required to pay estimated taxes on a quarterly basis. Fail to do so, and you will have to pay extra in penalties and fees.

It’s important to prioritize making quarterly tax payments in 2025 so you can avoid such additional costs.

Filling out tax paperwork can take hours, and it’s tempting to get to the end and press “file” without reviewing the information.

But small data-entry errors can throw off your calculations. That might come back to bite you in the form of future back taxes, penalties, and interest.

Reading through your paperwork and correcting mistakes now can save you a world of trouble down the road.

Steering clear of these nine common errors will help you avoid a potentially difficult financial situation when filing a tax return.

If you need help correctly calculating your taxes for 2024 or simply want more guidance as you move through 2025, consider contacting a financial advisor or tax professional who might offer crucial tips that can help you get ahead financially.