If you’re unable to pay your tax debt, there are tax resolution services to help. One tax relief service is IRS Payment Plans. In other words, you work with the IRS to pay back the debt in affordable monthly payments. The IRS understands that not everyone can pay back their tax debt all at once. However, don’t be fooled—they are also extremely aggressive when it comes to the money you owe. In other words, if you don’t pay it back, they will come after you. But, you can avoid that by entering into a tax relief program that works for you. One of those tax resolution programs may be an IRS payment plan. However, not all IRS payment plans will work for everyone. Your individual plan will depend on your economic situation and how much you owe.
Who qualifies for an IRS Payment Plan?
There are certain requirements to apply for an IRS payment plan to pay back tax debt. Your individual tax situation will determine which payment options are available to you. The less you owe in taxes, it’s likely you’ll be better able to pay it off quicker. In contrast, if you owe more, you’ll probably need more time to pay it off. However, this is often now how the IRS works. Typically, the more you owe, the better able they consider you to be able to pay off the tax debt. For instance, if you owe $100,000 in taxes, that must be because you are doing pretty well in your business. Therefore, you should have the funds to be able to pay off taxes in a short amount of time. However, that’s not always true. Here are the IRS payment plans currently offered.
Long-Term IRS Payment Plans
These types of IRS payment plans are for taxpayers who owe less than $50,000 in taxes. Furthermore, this total includes combined tax, penalties, and interest for all filed tax returns. A long-term IRS payment plan gives you 120 or more days to pay off the tax debt.
Short-Term IRS Payment Plan
These types of IRS payment plans are for taxpayers who owe less than $100,000 in taxes. Furthermore, this total includes combined tax, penalties, and interest for all filed tax returns. A short-term IRS payment plan gives you 120 days or less to pay off the tax debt.
How do I set up an IRS payment plan?
The first thing to do is to figure out how much you owe in taxes. In this case, it will be helpful to work with a tax relief services company. Of course, you can contact the IRS on your own. However, speaking directly with the IRS can often be stressful and time-consuming. A tax resolution professional will contact the IRS to determine how much you owe. Additionally, a tax relief professional can get copies of your tax returns. Furthermore, your total due will include your original tax balance, plus penalties and interest. Next, you will need to fill out a form. This form is called an Installment Agreement Request. The professionals at FinishLine Tax Solutions can help you fill out necessary forms to apply for an IRS payment plan.
How much does it cost to apply for an IRS Payment Plan?
There is a user fee that the IRS charges to set up an IRS Payment plan. However, the fee depends on the payment plan you apply for.
- First, if you decide to pay in full, there is no setup fee. Additionally, not future penalties or interest are added.
- Second, a short-term payment plan has no setup fee. However, you will continue to accrue penalties and interest until your balance is zero.
- Third, a long-term payment plan has a setup fee of $31. However, the IRS waives this fee for low-income taxpayers. Your interest and penalties will accrue until your balance is zero.
However, it’s important to note that the above setups fees only apply if you pay monthly via automatic debit. In contrast, there’s a $149 setup fee for non-direct debt. This fee is $43 for low-income taxpayers. The fee is reimbursed for low-income taxpayers.
Can I revise an IRS Payment Plan?
Once you are in an IRS Payment Plan, there are some changes you can make. These changes can be made via the IRS Online Payment Agreement tool. Changes you can make to your existing IRS payment plan include:
- Changing the monthly payment amount.
- Requesting a change for your monthly payment due date.
- Converting an existing agreement to a direct debit agreement.
- Reinstating your IRS payment plan if you default on payments.
What if I miss a payment for an IRS Payment Plan?
You do not want to miss any payments when you’re enrolled in an IRS Payment Plan. Furthermore, that’s why it’s beneficial to have these payments automatically withdrawn if you’re able. However, there are things you can do to ensure your payment gets there on time. First, mail your monthly payment to the IRS at least seven to 10 days before the due date. This will help ensure the IRS receives your payment on time. The safest payment method is IRS Direct Pay. You can log into the online portal to change your account to a direct debit at any time.
What if I can’t pay my payment?
If you are unable to make your monthly payment, there are options. However, it’s very important to be in touch with your tax relief services professional. You will need to contact the IRS directly if you are unable to make payments. However, speaking directly with the IRS can be stressful and time-consuming. Therefore, it’s much simpler to have your tax relief professional deal directly with the IRS. The professionals at FinishLine Tax Solutions have years of experience working directly with the IRS. Similarly, we have handled many IRS Payment Plan cases. In other words, you can guarantee we know what to do to help you become tax debt-free.
Is IRS Payment Plan Effective?
An IRS Payment Plan is a very effective tool to pay off your tax debt. In other words, you can pay off your tax debt in an affordable monthly amount. We understand that paying off taxes can cause financial hardship for many taxpayers. For that reason, we are here to help with setting you up with an IRS Payment Plan. This way, you can pay back your taxes, but in affordable monthly payments. You don’t want your tax debt to get you into even more financial trouble. Likewise, an IRS Payment Plan can help you stay out of financial trouble and out of tax trouble. By coming up with a monthly payment plan, you can effectively pay back taxes. What’s more, you can effectively pay back taxes at a monthly rate that works for you.
What do I need to apply for an IRS payment plan?
It can be fairly easy to set up an IRS Payment Plan with your tax resolution services firm. However, there are some requirements for applying for an IRS payment plan. These requirements include:
- First, you must have filed all previous tax returns.
- Second, you must owe the IRS no more than $50,000 for long-term payment plans. In other words, you must owe less than $50,000 to have more than 120 days to pay back taxes.
- Third, for short-term agreements, you must owe less than $100,000. A short-term payment plan gives you 120 days to pay off taxes.
In general, you should be able to pay off taxes in 72 monthly payments or less.
What are the monthly payment minimums for IRS Payment Plans?
Your monthly payment for an IRS Payment Plan will depend on how much you owe, and your financial situation. The best thing to do is to negotiate a payment plan amount with the IRS. However, it can be stressful negotiating with the IRS when you don’t know much about the IRS. Therefore, it’s very helpful to work with a tax relief professional to apply for an IRS Payment Plan. The IRS will typically look to you to suggest a monthly amount you can pay. However, you need to make sure you don’t suggest an amount that’s too low. Furthermore, if you don’t request an amount at all, the IRS will make one up for you. This amount from the IRS will usually be your tax balance divided by 72. In other words, working with a tax relief professional can get you the best monthly payment plan deal with the IRS.
Get Help with IRS Payment Plans
If you need help with an IRS Payment Plan, the professionals at FinishLine Tax Solutions are here to help. We’ve helped thousands of clients with paying back their tax debt in affordable monthly payments. In other words, we can help you too. Don’t deal with the IRS on your own. Trust us, that never ends well. The IRS is extremely aggressive when it comes to collecting their money. In other words, they won’t stop until they have their money. Give us a call and we’ll help you get the IRS off your back for good. We can help you with wage garnishments, bank levy release, innocent spouse relief, state tax resolutions and we can pair you with one of our expert tax attorneys, CAPs, or enrolled agents.
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