If you know that you are going to owe more than you are going to be able to pay, and you are not sure what you should do, here are some helpful hints. First, at least file your return. Most people are not aware that it is not against the law to owe taxes, but it is against the law not to file your return. Not only is it against the law, but you will incur significant penalties for not filing by April 15.
Be sure you file your return, and if you owe, but cannot pay, you can file a form 9465 (available on irs.gov) with your return asking for a payment plan. You will still incur penalties for not paying by April 15, but you will prevent putting your wages and bank account at risk of being levied.
If you choose not to file form 9465, just be sure you respond to the notices you receive. If you choose to ignore the notices the IRS sends you, you will soon find your wages levied and your bank account cleaned out. Do not ignore these notices or you will find levies and tax liens filed against you. Tax liens will ruin your credit and make it difficult for you to get loans, and make selling your home and certain other property difficult.
File your returns and work out a payment plan with the IRS. In case you are wondering, no, I do not work for the IRS. I am an Enrolled Agent and everyday I work with clients whose wages have been levied, bank accounts have been cleaned out and business closed because they chose to ignore the IRS and their filing requirements.
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