Q: I just found out that I will owe income taxes, but I don't have the money! What can I do?

A: I'm glad you asked, because this is an expensive situation if you ignore it. Even those filing for a tax extension are required to pay the taxes owed now. And if you fail to file and pay by April 17, you can face a penalty of 5 percent of the tax owed for each month, or fraction of a month, that the return is overdue — capped at 25 percent.

Plus, you'll owe interest on the taxes that were due, accruing at a rate of 3 percent compounded daily.

You do have some choices:

Short-term administrative extension: If you think you can pay the full amount within the next four months, you can ask the IRS for this extension. But you must be prepared to pay when the 120 days is up.

'Fresh Start' relief: This is a new program to help those who have been unemployed. If you are a wage-earner who was unemployed at least 30 consecutive days during 2011 or in 2012, or if you were self-employed and had a 25 percent or greater reduction in business income because of the economy, you may be eligible for the IRS' "Fresh Start" program.

To request penalty relief, you must file Form 1127A. Your adjusted gross income cannot exceed $200,000 if married and filing jointly, or $100,000 if your filing status is single. The balance due in taxes for 2011 cannot exceed $50,000. And this is relief only from those steep penalties; the interest continues to accrue at 3 percent.

Installment agreement: You can come to a deal with the IRS to accept installment payments — if you have a good filing and payment history over the past five years, and if the amount owed is less than $10,000, and if you can agree to pay it off within three years.

"Offer in compromise": You don't have to go to war with the IRS to get them to agree to a lower tax payment, but you might want to engage a professional to represent you if you owe a large amount.

Charge it: Although the idea of paying your taxes through your credit card may be initially enticing, this can be a disastrous step for your personal finances. You can make credit-card payments through some tax software programs or by calling one of the IRS-authorized services at 888-272-9829 or 888-729-1040. The providers will give you immediate confirmation showing the payment has been accepted by the Treasury.

But if you don't pay off your card balance immediately, interest charges on your outstanding balance might be higher than the IRS interest rate and penalty combined. Plus, the "authorized providers" charge a convenience fee of up to 3.35 percent for this service, which, is likely to offset any mileage or rewards that you get by using your credit-card for payment.

One more tip: If you wind up owing taxes this year, contact your employer about withholding more from your paycheck so you don't have the same problem next year.

Not having enough money to pay your taxes is an expensive mistake. And that's The Savage Truth.

Terry Savage is a registered investment adviser and is on the board of the Chicago Mercantile Exchange. She appears weekly on WMAQ-Channel 5's 4:30 p.m. newscast, and can be reached at www.terrysavage.com. She is the author of the new book, "The New Savage Number: How Much Money Do You Really Need to Retire?" To find out more about Terry Savage and read her past columns, visit the Creators Syndicate Web page at www.creators.com.