What Is The Minimum Payment The IRS Will Accept On A Tax Bill?
The amount for your payment plan depends on the level of tax debt you are facing.
If you have $10,000 or less tax debt
Are you facing up to $10,000 in tax debts? If so, the IRS typically grants approval for a payment plan without any hesitation. Furthermore, there is much flexibility when it comes to setting terms of the installment agreement which can be completed within three years with no minimum payments required. However, don't forget that interest still accumulates during this time - consider making larger monthly payments as this will reduce your overall financial burden and help cover the costs more quickly!
If you have $10,000 to $25,000 tax debt
The IRS offers taxpayers who owe between $10,000 and $25,000 a six-year window to repay their taxes. Though the minimum monthly payment is mandated by the government, you can pay more than what is due in order to expedite your debt payoff journey if desired.
To make your minimum payment, divide the debt you owe by seventy-two - that's how many months are in a six-year period. Don't forget to pay interest too; larger payments will help cut down on this cost and save you money over time.
If you have $25,000 to $50,000tax debt
If you're dealing with a tax debt of at least $25,000, the IRS requires more thorough documentation and paperwork when applying for your payment plan. To ensure successful repayment of your tax obligations, make sure to provide all requested financial information and complete any extra required forms.
For those with an unpaid balance between $10,000 and $25,000, you will have six years to pay off your debt. This means that the absolute minimum payment each month should be determined by dividing your total amount owed by 72.
If you have over $50,000 in tax debt
If the amount you owe to the IRS exceeds $50,000, they will require a close examination of your financial records before any payment arrangement is approved. This includes bank and brokerage statements as well as other important documents.
The IRS understands that each individual has a unique financial situation and will work with taxpayers to create customized payment plans accordingly. The length of time needed to repay the tax debt is dependent on your circumstance, as well as the minimum payments required along the way.