Tax Facts

Payment Plans with the IRS

If you had a larger tax liability than you had expected this year, you can make monthly payments through an installment agreement with the IRS if you're not financially able to pay your tax debt immediately. To reduce or eliminate the amount of penalties and interest you pay and to avoid the associated fee for setting up a payment plan, you should pay your tax bill in full.

Make sure you file all require tax returns, consider any other source of financial assistance to pay your tax debt, determine the largest amount you can pay up front and then the maximum you can afford each month to pay and then know that any future refunds will be applied to your tax debt until it is paid in full.

The fees for setting up a payment plan with the IRS are: $52 for a direct debit agreement, $120 for a standard agreement or a payroll deduction agreement and $43 if your income is below a certain level.

There are different forms and sections of forms to fill out for any one of the options listed above. Contact a tax professional to assist you, should you decide to go for a payment plan.

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