The majority of people who file taxes wind up with a refund each year. But what if you're in that smaller percentage of filers who owe the IRS money? Under normal circumstances, that's a stressful situation to contend with. During the ongoing COVID-19 crisis, it could spell disaster, especially if you happen to be out of work, which is the case for millions of Americans who have lost their jobs in the past few weeks.

If you're looking at a tax bill right now, here are a few things you can do to make the situation easier on yourself.

1. Hold off on paying the IRS

Normally, you only have until April 15 to file your previous year's tax return and pay the IRS any money it indicates that you owe. This year, however, because of COVID-19, the deadline to both file a tax return and pay a tax bill for 2019 has been pushed back three months to July 15, 2020. As such, if you've recently completed your 2019 return and see that you owe money, you can submit that return but hold off on paying the taxes associated with it for another three months (you're not required to make a payment the day you turn in your taxes). That way, you'll potentially have more time to scrounge up some cash.

Man with serious expression looking at laptop screen


2. Ask to get on an installment agreement

Even when we're not in the middle of a crisis, the IRS will usually work with people who don't have the means of paying their tax debt on time. If that's the situation you're in, reach out to the IRS and ask to get on an installment agreement. You can think of it as a payment plan, where instead of writing out a huge check, you pay your balance over time. And the best part? If you think you'll be able to pay off your balance within 120 days of when it's due (for this year, that means within 120 days of July 15), you won't pay a fee to set up that arrangement. Otherwise, you'll pay a modest fee for setting up a direct debit with the IRS, which may be reduced if you're a low enough earner.

3. Propose an offer in compromise

With an offer in compromise, you offer to settle your tax debt with the IRS for less than the amount you owe. This option is not unique to the COVID-19 crisis; it's been around for years. But it's also extremely difficult to qualify for. In a nutshell, for the IRS to accept an offer in compromise, you need to prove that paying your tax debt in full will constitute an undue financial hardship, or that you truly don't have the means to pay it. And also, your offer will need to be reasonable. If you owe the IRS $8,000, it probably won't accept $1,000 of it and call it a day. But if you offer to pay half, the IRS may agree under the right circumstances.

Keep in mind that a layoff resulting from COVID-19 may not be a valid reason to not pay your tax bill in full. Though unemployment is rampant right now, many people in that boat are without a paycheck temporarily, so be careful when trying to point to the crisis as a reason to wipe out some of your debt.

Owing taxes in the middle of a pandemic is less than ideal. If that's the boat you're in, don't panic. Rather, explore your options and see what makes the most sense given your circumstances.