What Is The Minimum Payment The IRS Will Accept?

What Is The Minimum Payment The IRS Will Accept?

Are you unable to pay your entire tax bill by the deadline? The Internal Revenue Service (IRS) may accept a minimum payment. This article explains what that is, how you can make it, and what other options are available if the lowest amount isn't feasible for you. Educating yourself on this option can help manage your debt and prevent additional penalties or repercussions from occurring.

What Is An IRS Payment Plan?

If you're unable to pay the full amount of taxes due on your tax return, an IRS payment plan can help. These payment plans allow taxpayers to spread out their payments over a set number of months or years so that they are able to manage it more efficiently than paying everything in one lump sum. An IRS payment plan is truly an invaluable solution for those who need assistance with covering their back taxes!

Different payment plans are available, each possessing exclusive features and benefits depending on your individual needs.

There are three main types of plans:

  • Guaranteed installment agreement. If your debt with the IRS totals $10,000 or less and you haven't committed any late payments in the past five years, then you are eligible to enter into an agreement. This deal requires that you pay on time going forward and settle what is owed within three years - a feasible solution for those looking to get their financials back on track!
  • Partial payment installment agreement. Have a tax debt of more than $10,000? Can't afford to pay it all at once? Then consider one of these agreements that will help you settle your liability for less. All you need is an up-to-date filing status with no bankruptcies and the ability to prove that paying in full isn't feasible for you.
  • Individual payment plan (short-term + long-term). Looking for a payment plan that won't break the bank? Short-term plans are just what you need—no fees and an interest rate applicable. If you're searching for something more long-term, we have those too! Plans lasting longer than 120 days also come with set-up costs to get started.
What Is The Minimum Payment The IRS Will Accept On A Tax Bill?

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, simply divide the amount of 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 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.

What Is The Minimum Payment The IRS Will Accept?

Who Is Eligible?

Did you know that there's no need to phone the IRS for a payment plan? If you fit the following criteria, then it is possible to apply online for a short- or long-term payment plan in just minutes:

Long-term payment plan: You've filed all your tax returns and owe no more than $50,000 in taxes, penalties, and interest.

Short-term payment plan: Your total tax, penalty, and interest liability is less than $100,000.

Who Is Eligible?

How Can I Make A Minimum Payment To The IRS?

Struggling to settle your balance upfront or within 180 days? You may be eligible for a monthly payment plan. To begin the application process, you can fill out Form 9465 on our OPA Application and submit it either through mail or contact us directly at the telephone number below. As part of this installment agreement, you will have multiple options in order to pay off your tax debt with manageable monthly payments over time!

  • Automatically withdraw money from your bank account with direct debit.
  • Utilizing payroll withdrawal from your employer,
  • Payment thru EFTPS
  • Paying with a credit or debit card over the phone or on the web is simple and secure.
  • Payment by check or money order is accepted.
  • Paying with cash at a retail store is easy and secure.

When you agree to a payment plan with the IRS, there is usually a user fee associated; however, if your income qualifies as low-income level according to certain requirements then this fee can be lowered or even eliminated entirely in some cases.

What Are The Options For Paying Taxes If I Can't Afford The Minimum Payment?

To Set Up An IRS Payment Plan

The IRS is deeply aware of the fact that not all taxpayers can pay their taxes upfront and instead, opt for a payment plan. Keeping this in mind, it strives to ensure the smooth setup of such arrangements by offering as much convenience as possible.

If you owe less than $50,000 and are searching for a long-term repayment solution, then apply online now. If your debt is up to $100,000 or under then you're eligible to explore short-term options too!

To be eligible for an IRS payment plan, you must have the following information on hand:

  • E-mail address
  • The address found on your most recent filed tax return.
  • Date of birth
  • Filing status
  • Provide a Social Security Number or Individual Tax ID Number (ITIN)

Depending on the agreement you request, you may also need to pay off any remaining balance.

To verify your identity, you will need to provide the following:

Financial account number or

Your personal cell phone number

Receive your activation code via postal mail within 5-10 business days.

Should you owe more than the specified amount for applying through the internet, then it is essential to make contact with the IRS directly.

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Is It Possible For Me To Apply On My Own For An IRS Payment Plan?

Absolutely! You have the option to apply for a payment plan free of charge, without having to pay any additional fees or commissions.

When entrusting a tax-relief company to assist you with your debt, it is critical that you exercise vigilant caution and conduct comprehensive due diligence. Depending on the circumstances, it may be necessary for them to have power of attorney in order for them to apply for an IRS payment plan. Heed the advice from the Federal Trade Commission's website: tread carefully!