I Owe The IRS More Than I Can Pay Right Now, Help!
If you are one of those people concerned about how you’re going to pay Uncle Sam next week, you have options. If you cannot come up with your payment or cover it with a credit card, you may be allowed to pay off your tax bill over time. The IRS offers a couple different ways to spread out your tax bill over the course of a few months.
There are two primary ways to stretch out tax payments if you’re unable to cover it all at once. The one you choose largely depends on your situation. A short term payment plan means that you can pay your tax bill in 120 days or less. If you qualify for this type of payment, applying is easy and can be done so online.
The long-term payment version, also called an installment agreement, can be paid in a term of up to six years. Installment agreements can be paid by direct deposit from a bank account or a payroll deduction to help ensure that taxpayers don’t forget to make payments. To request an installment agreement, you have to file a Form 9465 with the IRS. If you owe less than $50,000, you can apply for an installment agreement online.
If you owe the government less than $10,000 then the IRS usually automatically approves your payment plan as a guaranteed installment agreement. These agreements typically have no monthly minimum payments. When you owe tax of more than $10,000 but less than $25,000, qualification isn't guaranteed, but the IRS says that most taxpayers who apply still usually are eligible for what it calls a streamlined installment plan. These monthly payments are typically the total debt you owe divided by the term of your installment plan. For taxpayers owing $50,000 or more, you’re still eligible for a plan. However, the IRS will want to know a lot more information about you and it may be beneficial to seek help from a tax professional.
The professionals at The Center for Financial, Legal, and Tax Planning are more than knowledgeable with regards to installment plans, offers in compromise, and other forms of satisfying tax debts with the IRS. Please contact us at (618) 997-3436 with any questions.