The deadline for your tax payments is closer and closer and you still don’t have the entire amount of money. It’s not such a critical situation as it might seem, because everyone unable to pay the entire amount due at a time can ask for an installment agreement.
What’s an installment agreement?
This is an agreement or a plan between you and IRS according to which you will be able to pay your taxes in monthly installments. In order to benefit from this option, you should have already filed a tax return and have no unpaid taxes when asking for it.
What do I have to do to set it up?
Depending on the amount you owe, there are two possibilities to obtain an installment agreement:
• Those who owe less than $25,000 can fill the Online Payment Agreement, call the number on the bill or fill the 9465 Form(Request for Installment Agreement) and mail it to the address on the envelope, along with the tax return;
• Those who owe more than $25,000 must fill the 433F Form (Collection Information Statement Form) and the 9465 Form and mail them both to the office.
The IRS will let you know if you have to fill-in anything else, modify something or if your request has been accepted within 30 days.
Will it cost me more?
Definitely yes. Not only because of the set-up fee which is around $45, but also because the IRS will add some more fees and the interest calculated daily throughout the process. Even it might seem harder to pay all the money due at once, on the long run, it’s a lot less expensive than the installment agreement.
