If you owe taxes to the Internal Revenue Service (IRS), you may be able to set up a payment plan. This is known as an installment agreement and can be done online. Here`s what you need to know.
First, it`s important to note that not everyone will qualify for an installment agreement. There are certain criteria that must be met, such as owing less than $50,000 in taxes and filing all prior year tax returns. If you meet these requirements, you can apply for an installment agreement online.
To do so, visit the IRS website and navigate to the Online Payment Agreement application. You`ll need to provide some personal information, such as your Social Security number, date of birth, and filing status. You`ll also need to provide information about your tax liability and how much you can afford to pay each month.
Once you`ve submitted your application, the IRS will review it and let you know if you`re approved. If you are, you`ll be able to set up automatic payments each month until your tax debt is paid off.
It`s important to note that there are fees associated with setting up an installment agreement. For example, there`s a one-time fee of $31 if you apply online, and a fee of $107 if you apply by mail or in person. Additionally, interest and penalties will continue to accrue on your unpaid tax balance until it`s paid off in full.
If you`re struggling to pay your taxes, an installment agreement can be a helpful option. Just remember that there are certain criteria you must meet, and there may be fees and interest associated with the agreement. Be sure to carefully review the terms before agreeing to any payment plan.