You may have the financial ability pay off your tax debts, but maybe not all at once. No need to worry – there’s a way to eliminate back taxes through IRS installment payment plans. Instead of paying a large amount of money at once, you can pay smaller amount every month, depending on your financial situation.
Paying off your taxes with an installment payment plan might include penalties and interest. Depending on how much you owe to the IRS, you might be able to apply online or by mail. The fees are as follows:
- $52 for direct debit agreements
- $120 for standard or payroll deduction agreements
- $43 for low income agreements
Installment payment plans can be a lifesaver. Sometimes people come upon financial hardship, and the IRS has provisions to make paying back tax debts easier. Before applying for an installment payment plan, however, it is wise to ask for a short term extension, which grants extra time to pay back taxes.
Types of Installment Payment Agreement Online
The Online Payment Agreement (OPA) makes applying for installment payment plans simple. It can be done online in 3 easy steps. The IRS only accepts requests for installment payment plans if:
- You don’t owe more than $10,000 in taxes
- You have filed and paid your tax returns on time for the past 5 years
- You agree to settle your debts within 30 days
- You agree to comply with all tax laws of the time
- You furnish the IRS with all relevant information without hiding anything
- The IRS thinks you have a genuine case and that you really can’t pay your taxes as a lump sum without financial hardship
There are also plans for small businesses to pay back tax debts in installments, but it is usually much more difficult to get approval. In this situation, it is wise to hire a certified tax professional who knows everything about the tax code. You must meet specific conditions for each type of plan. Your IRS tax account must be in good standing, and you must have a genuine financial need at specific levels of tax debt.
Contact us at Long Island Tax Resolution Services today to keep you on the optimal path for your installment payment plan. We can help you get the most out of your plan and pay off your back taxes with minimum stress.