IRS Payment Plans – How Individuals Can Pay Taxes Owed to the IRS
If you do not have the ability to pay income taxes, there is a number of payment plans available from the IRS to assist in paying back taxes owed. Provided is a number of the most often used forms of IRS payment plans.
IRS installment agreement
A highly popular payment plan many individuals utilize in efforts to pay back taxes owed to the IRS is an installment agreement. Aside from being common, it is also easy to get an installment agreement from the IRS. An installment agreement allows you to give monthly payments to the IRS to reduce the complete debt owed in back taxes until it is eliminated. Often, it takes between three and five years to pay off an installment agreement.
Partial payment installment agreement
Similar to an installment agreement, the tax amount is reimbursed through the usage of monthly payments. However, it differs because under this agreement, you do not have to pay the total amount due in back taxes. This payment plan allows individuals to settle their back taxes with the IRS for a smaller amount that what was originally owed. Offers in compromise are time consuming and difficult to pursue, which makes filing for a partial payment installment agreement the more popular choice.
IRS short term payment extensions
Though this is not technically considered an official payment plan offered by the IRS, you do have the ability to request an extension for up to forty-five days. This will enable you to have more to pay owed back taxes. If you have a decent understanding of the IRS system and you know where you are on the automated IRS process, then you are capable of timing it to make a few smaller payments until the ability is provided to pay the entire debt.
Pay tax amount in full
If the possibility of paying off the full amount you owe to the IRS in back taxes is available, while still having enough income left to pay required monthly bills, then this is the best and easiest option to utilize. It gets rid of the IRS very quickly and you do not have to worry about any penalties and interest accruing due to nonpayment. Even if you do not have sufficient funds to pay in full, avenues are available to take to get the cash necessary.