Everywhere these days, commercials are vying to get you to spend your big tax refunds on their products and services—oh yeah, even that liposuction place! But you just finished preparing your taxes and you find out you OWE Uncle Sam big bucks. That is quite the sticker shock if you are short on cash or are unprepared.

There is one school of thought in which it is okay owing at the end of the year as long as one does not pay penalties—at least you did not have the government keep your money interest free!

But if you don’t like that line of thinking and owing money, here are some steps you can take to make life easier at tax time:

1. Check Your Withholding

Check the Forms W-4 you have filed with your employer to make sure you are having enough taxes taken out of your salary. The more taxes you need to be taken, the lower should your withholding number should be. It also matters if you put down if you are single or married. Many people get confused with the Form W-4—it lets you manage your cash flow from your paycheck.

2. Paying In Quarterly If You Are A Freelancer

This is how I think most freelancers can reduce the pain of owing a lot at tax time or the uncertainty of not knowing how much they will pay. The freelancer has more options as far their write-offs go. They can take certain expenses such as mileage, home office supplies, etc. and reduce their income.

3. Check If You Qualify For Contributions to IRA

If you have the cash, and if your income limits permit, you have time until the deadline to contribute into a Traditional IRA for the previous tax year. You can contribute a maximum of $5,500 (with a catch-up of $1000 if you are over 50 years old) and defer some income from taxes. Plus if your income is within the qualifying limits, you will also earn a Retirement Credit.

4. If You Are Married, Play Out The “Married Filing Separately” Scenario

Almost all married couples benefit from filing jointly but it doesn’t hurt to run a mock “Married Filing Separately” scenario to check if you could potentially reduce taxes. This is especially true of high-earners. Filing separately may put each of you in a lower income bracket and qualify you for some contributions and/ or deductions. Note: Do check if the state you live in is a community property state, rules here will be different for “married filing separate”.

5. Apply For An Extension

Okay. So you are still in sticker shock. Take a deep breath and apply for an extension. Get some time to figure out your finances and arrange for money. Send in as much as you can with the extension and check out the Internal Revenue Service’s various resources for:

• Installment / Payment Agreements: This can be done online or by filing Form 9465 with your tax return. You will qualify for this if you owe less than $50,000 as an individual or $25,000 as a business.
• An Offer-In-Compromise: You can find out if there is a way to settle your debt for less than what you owe.
• Delay the Collection Process: The Internal Revenue Service may determine that you cannot pay your tax debt and delay action in collecting it. But penalties and interest keep accruing till the debt is paid off.

These three suggestions above are all complicated methods of paying off your taxes and you will need professional assistance from an Enrolled Agent.