IRS Installment Plans - What Is The Minimum Monthly Payment?
The old saying goes 'nothing is certain but death and taxes'. But what if you are in a situation where you simply cannot afford to pay your income taxes? Every year, the IRS collects more than $3 trillion in taxes, and millions of Americans fall behind on their taxes simply because they cannot afford them. The IRS is an entity nobody really wants to have to deal with, however, they are willing to work with taxpayers. An Installment Plan is one of many ways to deal with your tax obligation to the IRS.
What Is An Installment Agreement/Plan?
Just as its name suggests, the installment plan pays taxes over time. While you are in a payment plan the IRS cannot take enforcement action against you. However, penalties and interest will continue to accrue. Monthly installments allow you to budget your tax debt and keeps the IRS off your back.
There are several options to repay the IRS. You should be informed before you set up any plan.
What Is The Minimum Monthly Payment?
This depends upon several things such as the amount of disposable income, expiration of the time the IRS has to collect the debt, the amount you owe etc. The IRS will ask what you can afford and will actively encourage you to pay as much as you can.
It is important to note there are fees in some cases. If your installment plan runs for more than 120 days you will have to pay a fee of $52 for a direct debit, $105 for a payroll deduction.
Getting The Help You Need
If you need help settling your tax debt, an installment plan with the IRS is an option available to you. Our team can help you understand more about installment plans as well as representing you during negotiations with the IRS. You should know it is possible to negotiate a reduced payment, or no payment at all if you know the process.
If you need to set up an installment plan, contact Tax Relief Advisers and talk to one of our experts.