Many Americans may find their tax bill excessively large this year given the sharp reduction in their net worth. As a result, many may want to get on a payment plan in order to ration the money that they have while still making payments on their tax bill. Luckily, the IRS offers payment plans and installment agreements that can make this process relatively easy for individuals.

The first thing to remember is that tax extensions are not the same thing as payment plans! Extensions allow individuals more time to file their returns, but still require individuals to make payments on the returns on time. As a result, those looking for payment plans to ease their financial burdens must follow a different process that we've outlined below.

Individuals have two options depending on how much money they owe the government. The first option is the Online Payment Agreement (OPA) for those that owe less than $25,000 in combined tax, penalties, and interest. Individuals can either complete the agreement online or fill-in a Request for Installment Agreement (or Form 9465, in IRS-speak), which is also available online.

Individuals with more than $25,000 in combined tax, penalties, and interest may still qualify for an installment agreement, but a Collection Information Statement (or Form 433F) may need to be completed first. Individuals will receive a written notification telling them whether the terms of the installment agreement have been accepted or if they need to be modified.