If you owe the IRS money but can`t afford to pay it all at once, don`t despair: you may be able to set up an installment agreement online. An installment agreement is a payment plan that allows you to pay off your tax debt over time, instead of all at once. Thanks to the convenience of the internet, setting up an installment agreement with the IRS has never been easier.
Here`s what you need to know about setting up an installment agreement online:
1. Determine your eligibility: The first step in setting up an installment agreement is to determine whether you are eligible. Generally, you must owe less than $50,000 in taxes, penalties, and interest, and you must be able to pay off your debt within six years. If you owe more than $50,000, you may still be able to set up an installment agreement, but you will need to provide additional financial information to the IRS.
2. Gather your information: In order to set up an installment agreement, you will need to provide the IRS with some basic information, such as your name, address, Social Security number, and the amount of tax debt you owe. You will also need to provide information about your income and expenses, so the IRS can determine the monthly payment amount for your installment agreement.
3. Go online: Once you have determined your eligibility and gathered your information, it`s time to go online and set up your installment agreement. Visit the IRS website and click on “Online Payment Agreement” under the “Tools” section. Follow the prompts to enter your information and set up your payment plan.
4. Make your payments: Once your installment agreement is set up, you will need to make your monthly payments on time. You can choose to have your payments automatically deducted from your bank account, or you can make manual payments each month. If you miss a payment, the IRS may cancel your installment agreement and take enforcement action against you.
5. Stay in touch: If your financial situation changes or you are having trouble making your payments, it`s important to stay in touch with the IRS. You may be able to modify your installment agreement or request a temporary delay in your payments.
In conclusion, setting up an installment agreement online with the IRS can be a straightforward process if you are eligible and have your information ready. By making your payments on time and staying in touch with the IRS, you can successfully pay off your tax debt over time and avoid enforcement action.