The dreaded tax filing day for individuals has passed on Monday, April 18th (extended due to DC Holiday). If you were afraid to file and did not because you knew you were going to owe you should have filed as there are larger penalties for not filing!
If you filed for filed an extension, and you still have a bill to Uncle Sam you will have trouble paying, you should request a payment plan online at IRS.gov as soon as possible.
Tax Payment Plans
Each taxpayer(s) situation is unique and there are options — short-term (less than 6 months) or long-term (72 months) payments. Monthly payments can be made either by check or via direct debit.
You may file online if your debt is $50,000 or below including penalties and interest, and have filed all required tax returns.
Short-term payment plans are available if you owe $100,000 or less including penalties and interest.
- If you are unable to use a computer, you may file form 9465 or apply by phone. Applying by phone may incur higher fees.
- Fees are $-0- set-up fee for short-term payment plans done online; $31 for long-term completed online; $107 if you must do it via phone or in person. There are also options for low-income taxpayers where the fee may be reimbursed if certain conditions are met.
What About Interest?
On all plans accrued interest and penalties are added until the balance is satisfied. Always calculate the lowest payment possible and then pay more. Calculate and agree to pay the minimum so that you are not thrown out of the payment plan if there comes a month when your cash is tight. Just make sure to pay the taxes as promised in your agreement!
Schedule Ahead of Time
Again, payments can be made via check, money order, or a debit/credit card and I always recommend auto bank draft as the payments can be scheduled 365 days ahead ensuring you are never late.