IRS Installment Agreements

If a taxpayer is unable to pay their federal income tax due, they can opt to enter into an installment agreement with the IRS to make monthly payments. Are you in a situation where you don’t have the funds to pay your tax bill by the April 15th filing deadline?

If you need to set up a payment plan to pay your federal income taxes, remember to do the following before you apply for an installment agreement:

  • File all required tax returns by their due dates;
  • Compare the cost of other payment sources (e.g., loan or credit card) to pay your tax debt in full with the costs of an installment agreement;
  • Determine the largest monthly payment you will be able to make ($25 minimum payment is required); and
  • Know that any future refunds will be applied to your tax debt until it is paid in full.

Once you have determined that an installment agreement is your best available option, you can apply for an installment by:

  • Applying online on the IRS website if you owe $50,000 or less in combined individual income taxes, penalties and interest; or
  • Completing and mailing Form 9465 Installment Agreement Request (Note: if you owe more than $50,000 you will also need to complete Form 433-F Collection Information Statement).

Once your request for an installment agreement has been granted, take the time to understand the agreement and keep the payment account in good standing by:

  • Paying at least the minimum monthly payment when it’s due;
  • Including your name, address, social security number, phone number, tax year, and return type on every payment;
  • Filing all future tax returns on time;
  • Paying all future taxes owed in full and on time (or request to change your existing installment agreement for the new taxes owed); and
  • Ensuring your installment agreement statement is sent to the correct address (i.e., remember to file Form 8822 Change of Address if you move).

Flexible Accounting Services of the Triangle is available to assist you with all your tax filing and payment arrangements. Contact us today and let us help you manage your tax debt.