The April 17th tax deadline is rapidly approaching, and millions of people wait until the very last minute to file.

But what happens if you can't file your 2011 returns on time or pay your taxes?

The IRS says don't panic. But the worst thing you can do is to simply ignore the deadline.

"Even if you owe money and you don't know how you're going to be able to afford to pay that balance due, first and foremost file your taxes," says Kathy Pickering, executive director of the H&R Block Tax Institute.

"You can work out a payment plan with the IRS." You may incur some interest or some payments, she says, but the penalties are far worse if you don't file.

Automatic extensions are available to taxpayers who need more time to finish their returns. But remember: this is an extension of time to file; not an extension of time to pay.

"What you can do is just file without even paying your taxes and they'll contact you," says Pickering. The IRS will send you a letter "and you can work out a payment plan then."

Taxpayers will avoid stiff penalties if they file either a regular income tax return or a request for a tax-filing extension by this year's April 17 deadline.

People who haven't finished filling out their return can get an automatic six-month extension. The fastest and easiest way to get the extra time is through the free file link on IRS.gov. Use form 4868.

By properly filing this form, a taxpayer will avoid the late-filing penalty, normally 5 percent per month based on the unpaid balance that applies to returns filed after the deadline.

Last month, the IRS introduced the Fresh Start program for people who are out of work.

"If you've been unemployed for 30 days or more, whether in 2011 or 2012, you can have until October 15th to pay your taxes in full and they won't assess the failure to pay penalty," says Pickering. "I think it's going to be a good program for some people."

Some taxpayers get more time to file without having to ask for it. These include: taxpayers who live and work abroad, as well as members of the military on duty outside the U.S. They have until June 15 to file. Tax payments are still due April 17.

Members of the military and others serving in Iraq, Afghanistan or other combat zones can wait at least 180 days after they leave before they have to file or pay taxes.

People affected by certain tornadoes, severe storms, floods and other recent natural disasters may have until May 31 to file and pay. If this may be you, find out more information at the official website, IRS.gov.

Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc