Tax Day Whiplash: Soften the Blow If It Turns Out You Owe

I was intending to fantasize about how I would spend some of my tax refund (dinner at CityZen) and then offer compelling analysis of how I should make the rest work for me (pay off debt, bolster savings, invest in conservative stocks).

But financial realities have once again intruded: I owe the federal government $2,401. My refund from the District is $652. That means I am on the hook for a net of $1,749.

I sought advice from the flurry of tax-related mail that has flooded my inbox in recent weeks.

Don't panic. That's from the California Society of CPAs. But it's too late. I am already starting to freak out at my desk.

Don't panic. The IRS suggests the same thing. Do people not realize this is easier said than done? Beyond that, pay as much as possible by today's deadline. That will help reduce any penalties and interest charged on the balance.

Pay in installments. This sounds attractive, but the fees are actually pretty high. The IRS charges $105 for setting it up, though they will knock it down to $52 if the payments are deducted directly from your checking account. The good news: If you pay off your balance within 120 days, the fees are waived.

Don't turn to your credit card. Money Under 30, a blog, warns against using this crutch. Third-party fees are 2.5 percent to 4 percent of the charge for the transaction in addition to whatever interest rate your card charges.

Get free stuff. Take the edge off by indulging in free treats and discounts. The Frugalista blog reports that Cinnabon and Maggie Moo's are giving snacks away while Papa John's and P.F. Chang's are offering discounts today.

To pay our tax bill, my husband and I will have to dip into our savings account (again). We will have to redo the budget for projects we had planned for our new house on Capitol Hill. But I guess that's what I get for dreaming.

-- Ylan Mui