In 2020 approximately 125 million Americans received a tax refund, leaving about 43 million Americans who either broke even or owed money, according to statistics from the Internal Revenue Service. Breaking even – not receiving a refund – is actually good. It means you gave Uncle Sam just the right amount. Owing taxes, of course, is another story.

If you’re under financial stress this year, you may be wondering: What if I can’t pay my taxes?

Generally, you have three options:

Everyone’s tax situation is different, and there is no one-size-fits-all strategy, so you really should consult a tax professional for advice. Still, if you’re looking for some guidance, experts generally recommend these three maneuvers.

If you’re behind on your taxes but feel you can catch up eventually, this is probably your most appealing option. After you file your tax return, fill out an online payment agreement application on the IRS website.

You can also mail in your taxes and include Form 9465. The form is used for taxpayers who are interested in a monthly installment plan. The IRS will give you 72 months to pay your bill, provided you owe $50,000 or less in combined tax, penalties and interest.

Hopefully you haven’t neglected to file your taxes in previous years, though. You can’t get on an installment payment agreement with the IRS until you’re caught up on filing past returns.

“Definitely contact the IRS and get on a payment plan,” says Dennis Brager, a certified tax specialist and tax attorney who owns Brager Tax Law Group in Los Angeles. He also is a former senior trial attorney for the IRS’ Office of Chief Counsel.

“If you can’t pay the IRS anything, especially if you have been impacted by COVID, then ask them to declare your account ‘temporarily not collectible,’” Brager says.

That said, the label is more or less a placeholder so that the IRS will know your status. Beyond that, it won’t help you much. Brager says the IRS will still charge you interest and probably late payment penalties.

Why you might want to do this: Maybe you can finally de-stress. You’ll pay the IRS monthly, and maybe your anxiety will diminish.

What may be problematic: Interest will still accumulate with the installment plan in place. If your debt continues to pile up, the IRS can file a federal tax lien against you and your property, which can make it challenging to get a decent loan.

The tricky part about paying an installment loan with the IRS, especially if you’re self-employed and need to make quarterly tax payments: While you’re paying your back taxes in a monthly installment plan, you still need to make payments on the current year so you don’t keep falling behind.

In fact, if you make your monthly payment too high and fail to budget enough so you can pay taxes on the current year, you might start a vicious cycle of owing the IRS indefinitely.

This is the second approach the IRS recommends if a taxpayer simply cannot pay what they owe. In a nutshell, you make an offer to the IRS on what you feel that you can pay, and if they accept it, that’s what you pay.

According to the IRS website: “An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. We consider your unique set of facts and circumstances:

We generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time. Explore all other payment options before submitting an offer in compromise.”

Also worth noting: You will have to pay a $205 fee when you send your application, though you may be able to get it waived if you meet the agency’s low-income certification guidelines. If you owe money, though, and you truly believe you don’t owe what the IRS says, you can probably avoid the fee if you submit Form 656-L, “Offer in Compromise (Doubt as to Liability).”

Why you might want to do this: You don’t want to have this problem hanging over your head forever, and it can be a permanent solution to fixing your financial situation.

Brager likes the idea for some taxpayers.

“An offer in compromise is a great option if you owe a lot of money to the IRS, you have limited assets and limited ability to pay,” he says. “Paradoxically, the more you owe, the more likely you will be able to save money with an offer in compromise. Keep in mind that if the IRS thinks you can pay within the statute of limitations – generally 10 years – they will not accept an offer in compromise.”

What may be problematic: Generally, you’ll pay 20% of your offer up front – and then the rest through installments. If the IRS accepts the compromise, and you don’t live up to the agreement, it can sue you for the rest of the original amount of the tax debt you owe as well as penalties and interest.

Whatever happens, if you prepare your taxes and discover you owe a lot, do not become discouraged and not file. Whether you expect to do a monthly installment plan or an offer in compromise or you just need some time to think about what you want to do, file.

“If you can’t pay your taxes in full, for goodness’ sake, at least send partial payments every month,” says Bruce Givner, a tax attorney in Los Angeles with KFB Rice Law Group.

“For example, if your tax liability for 2020 is $25,000, and you don’t have $25,000, mail in your return – on time – and send with it a check for $500 or whatever else you can afford,” he says.

Why you might want to do this: First, you definitely want to send in your tax return. There’s no “might” about it. (You can, of course, file an extension. That doesn’t save you any money, but it gives you more time to prepare your taxes.)

“If you fail to send your return in on time, that is an entirely different penalty from failing to pay,” Givner says. “And the failure to file is worse than the failure to pay. It is 4.5% per month until it hits the 25% maximum. By contrast, the failure to pay is only 0.5% per month.”

If you want to ponder your next move, and you don’t have the money to pay your tax bill, sending in some money every month can reduce penalties down the road, and it will make you look good in the eyes of the IRS, according to Givner.

If you later try to work out something with a revenue officer at the IRS, Givner says, and the officer sees that you’ve made a payment or even multiple payments, “he or she will be in a lot better mood, and more interested in working out a formal payment arrangement with you.”

What may be problematic: Not working anything out will hurt you in the long run. Your tax debt will keep growing, and if you eventually have federal tax liens, that will hurt your credit. You’ll have a relatively small problem snowball into a big one.

If you’re broke, and you live in a modest home and aren’t considered wealthy, probably not. You’re going to eventually pay the IRS a lot of money in back taxes. Does it really make sense to also pay a tax attorney when you can talk to the IRS on the phone and send in the forms yourself?

On the other hand, for some people, it may not be such a bad idea.

“The more complex your situation, the more likely that the cost of professional help will be worth it. As a rule of thumb, if you owe less than $50,000, don’t own a business and all you want is a payment plan, then you probably don’t need professional help,” Brager says.

It doesn’t mean that it wouldn’t be nice to have that professional help, but you probably don’t need it.

“If you decide to pay for professional help, be sure to vet them carefully. Unfortunately, there are a lot of companies out there who will promise the moon, take your money and leave you worse off than you started,” Brager says.

To review, if you have an existing tax bill that you feel you can’t pay but you want to come to a solution, do the following: