Which Payment Plan is the Right One for Taxes You Owe?

Almost everyone owes taxes on an annual basis. Maybe you’ve had too many exemptions on your W-4 or you’ve earned contractor income that you didn’t put taxes aside for ahead of time. Whatever the reason, you might owe so much that you can’t pay all your taxes off at once. You could use a credit card to pay off the outstanding amount, but what if you don’t have one? Fortunately, the IRS offers payment plans, known as installment agreements, to help you pay off your debt. Here’s how to find out which one is right for you.

Standard Installment Agreement

Also known as a nondisclosure installment agreement, a standard installment agreement allows those who owe $25,000 or less in taxes to pay their outstanding debt in monthly installments for up to 72 months. This is the most straightforward option for repaying taxes. You don’t have to prove to the IRS that your financial situation is such that you can’t afford to pay your taxes in one lump sum. You also don’t have to reveal that your income goes toward servicing your debts.

Getting this kind of agreement is fairly easy. You fill out Form 9465 detailing why you need to pay off your taxes over time and wait for the IRS to approve payment. You won’t be penalized for nonpayment as long as you have sent this form to the IRS according to its instructions.

Streamlined Installment Agreement

Those who owe more than $25,000 in back taxes won’t qualify for a standard installment agreement. However, they can get into a payment plan under the streamlined installment agreement as long as they can meet certain criteria.

The IRS is testing new criteria under its Fresh Start program, which allows more taxpayers to qualify than would have in the past. Prior to testing, the IRS automatically filed a notice of federal tax lien. Now an IRS assistor can create an installment agreement without filling out a collection information statement or notifying the taxpayer that a tax lien will be filed against him or her. This is to encourage taxpayers to come forward and pay their outstanding tax debts without the threat of punishment.

Offer in Compromise

An offer in compromise (OIC) is a program that lets you pay less than you owe on your taxes. However, it’s not something that is easily obtained, and the IRS has stringent requirements for qualification. However, if you feel you can qualify for the program, you can eliminate your outstanding tax debt permanently. This is something you shouldn’t try on your own because the process is complex. It’s best to get help from a professional who understands the process.

Of course, it’s best if you don’t get into a situation where you owe the IRS money in the first place, but this is not always possible. Take advantage of the installment agreements offered by the IRS to stay out of trouble with the agency and focus on paying your taxes in the following year.

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Which Payment Plan is the Right One for Taxes You Owe?

Almost everyone owes taxes on an annual basis. Maybe you’ve had too many exemptions on your W-4 or you’ve earned contractor income that you didn’t put taxes aside for ahead of time. Whatever the reason, you might owe so much that you can’t pay all your taxes off at once. You could use a credit card to pay off the outstanding amount, but what if you don’t have one? Fortunately, the IRS offers payment plans, known as installment agreements, to help you pay off your debt. Here’s how to find out which one is right for you.

Standard Installment Agreement

Also known as a nondisclosure installment agreement, a standard installment agreement allows those who owe $25,000 or less in taxes to pay their outstanding debt in monthly installments for up to 72 months. This is the most straightforward option for repaying taxes. You don’t have to prove to the IRS that your financial situation is such that you can’t afford to pay your taxes in one lump sum. You also don’t have to reveal that your income goes toward servicing your debts.

Getting this kind of agreement is fairly easy. You fill out Form 9465 detailing why you need to pay off your taxes over time and wait for the IRS to approve payment. You won’t be penalized for nonpayment as long as you have sent this form to the IRS according to its instructions.

Streamlined Installment Agreement

Those who owe more than $25,000 in back taxes won’t qualify for a standard installment agreement. However, they can get into a payment plan under the streamlined installment agreement as long as they can meet certain criteria.

The IRS is testing new criteria under its Fresh Start program, which allows more taxpayers to qualify than would have in the past. Prior to testing, the IRS automatically filed a notice of federal tax lien. Now an IRS assistor can create an installment agreement without filling out a collection information statement or notifying the taxpayer that a tax lien will be filed against him or her. This is to encourage taxpayers to come forward and pay their outstanding tax debts without the threat of punishment.

Offer in Compromise

An offer in compromise (OIC) is a program that lets you pay less than you owe on your taxes. However, it’s not something that is easily obtained, and the IRS has stringent requirements for qualification. However, if you feel you can qualify for the program, you can eliminate your outstanding tax debt permanently. This is something you shouldn’t try on your own because the process is complex. It’s best to get help from a professional who understands the process.

Of course, it’s best if you don’t get into a situation where you owe the IRS money in the first place, but this is not always possible. Take advantage of the installment agreements offered by the IRS to stay out of trouble with the agency and focus on paying your taxes in the following year.

2,651 Responses to Which Payment Plan is the Right One for Taxes You Owe?
  1. music jobs
    July 8, 2019 | 3:56 am

    I¡¦ve recently started a web site, the information you offer on this website has helped me tremendously. Thanks for all of your time & work.

  2. bathroom remodel ideas
    July 8, 2019 | 3:56 am

    Definitely believe that which you said. Your favorite reason appeared to be on the net the easiest thing to be aware of. I say to you, I definitely get irked while people think about worries that they just don’t know about. You managed to hit the nail upon the top and also defined out the whole thing without having side effect , people could take a signal. Will likely be back to get more. Thanks

  3. business strategies
    July 8, 2019 | 3:57 am

    Generally I don’t read article on blogs, however I wish to say that this write-up very compelled me to take a look at and do it! Your writing style has been amazed me. Thanks, quite nice post.

  4. http://bit.ly
    July 8, 2019 | 11:08 am

    Howdy! This article couldn’t be written any better! Reading
    through this article reminds me of my previous roommate!
    He always kept preaching about this. I am going to send this post to him.
    Fairly certain he’ll have a good read. Thanks for sharing!

  5. antalya nakliyat
    July 8, 2019 | 8:27 pm

    Antalya nakliyat; İşinin temelinde memnuniyet yatan pek çok sektörün soru öncelikli olarak müşterisi üzerinde pozitif bir etki yaratmayı görev olarak kabul etmektedir. Burada sizin bireysel olarak kabul ettiğiniz görev ve bir o kadar sorumluluk içeren çalışma anlayışında, gerçekten endüstriyel nakliye çalışmalarının inanılmaz boyutta çok iyi sonuçları ortaya çıkmaktadır. Antalya nakliyat firmasının pratik ve hızlı çözüm üretme konusunda, yıllardan beri süregelen belli bir kabiliyeti bulunmaktadır. Bu kabiliyet siz değerli müşterileri zerinde her zaman iyi bir intiba ve iyi bir fırsat yaratmaya devam etmektedir. Oluşan en makul çözümlerle birlikte memnuniyet ve sadakat gerçekten sizin firmanızı daha iyi bir yere taşımaya devam edecektir. Böylelikle uygun fiyatlı hizmet ve taşımacılık anlayışından faydalanmak kolay olacaktır.

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    Maybe that is you! Taking a look ahead to look
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