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IRS Payment Plans & Installment Agreements

June 20th

Once you have found yourself in tax debt, you should begin looking for a way out.  We do not always have the ability to simply pay all of our debt upfront and in one installment.

Though this is the preferred process by the IRS, it is not always the most rational choice.  Sometimes you just may be unable to make such a large payment at once.  The IRS recognizes this and they give options to you in order to complete your tax obligations.  If you find yourself in a situation where you cannot make one single payment to level up, then you should next explore these options.

Paying Back my Tax Debt

Option number one is to investigate an IRS installment agreement.  With an installment agreement, you are able to fulfill your obligation through a number of large installment payments.  The benefit to this type of agreement is that you can avoid any fees if you are able to pay the balance within 120 days.  So, by simply applying online or calling up an agent and asking, you can give yourself three more months to take care of your debt.  If it will take you more than three months then you must pay fees to set up an agreement that allows the funds to be paid by direct debit or by payroll deduction.

The next option to investigate is an installment plan.  With an installment plan you will be agreeing to make monthly installments in order to pay off your tax debt.  This should always be your second option.  The main reason being that you will end up paying more in the long run because of the upfront fees you will also be charged for interest on your account.

 

 
 
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