| Making monthly payments on the taxes you | | | | mail in requests Form 9465 and Form |
| owe may be easier and more doable than | | | | 433F, which can be found online. |
| having to pay an outstanding tax bill in | | | | - If you are a taxpayer who has not |
| full. IRS installment agreements are | | | | received a notice from the IRS, but has |
| payment plans where taxpayers can pay | | | | filed taxes and know that you owe money, |
| taxes owed in small increments instead | | | | you can still set up a payment plan on |
| of having to pay one outstanding tax | | | | current year returns with the IRS using |
| bill. Installment agreements do not | | | | the Online Payment Agreement. |
| exist without their drawbacks, however. | | | | After applying for an installment |
| Expect interest and penalties with | | | | agreement, the IRS will send a written |
| installment agreements. Penalties | | | | notification stating whether the terms |
| include: | | | | of your request have been accepted or if |
| - One-time fee of $105 or one-time fee | | | | the request needs to be adjusted. |
| of $52 for payments deducted directly | | | | Once an installment agreement is set up, |
| from bank account | | | | installment payments as well as tax |
| - Fee of $45 for reinstating agreements | | | | return payments should be made on time |
| or changing existing agreements | | | | by direct debit from a checking account, |
| - Interest on tax not paid by its due | | | | payroll deductions from wages, or by |
| date | | | | mail. Payments can also be made by |
| - Late payment penalty for not paying | | | | check, credit card, certified funds, |
| the tax by the due date | | | | electronic funds transfer, or cash in |
| If you find that an installment | | | | person. The IRS recommends either direct |
| agreement may be worth the above fees, | | | | debit or payroll deductions to save |
| consider setting one up. Most taxpayers | | | | postage and help ensure that payments |
| who owe $25,000 or less will qualify for | | | | are made on time and that your agreement |
| an installment agreement. | | | | will not default. If you miss an |
| - For taxpayers who owe $25,000 or less: | | | | installment payment, you should contact |
| Visit the IRS website and go to the | | | | the IRS right away. A missed installment |
| Online Payment Agreement (OPA) ( or call | | | | payment could default your agreement |
| the phone number on your notice that you | | | | which could cause a Notice of Federal |
| owe money to the IRS. Before doing these | | | | Tax Lien or IRS levy. Aside from causing |
| things, be sure to have your social | | | | financial burdens, both of these can |
| security number and the notice with the | | | | negatively impact credit scores. |
| amount owed readily available. Those not | | | | If you already have an installment |
| wanting to fill in the request on the | | | | agreement, you may be able to |
| website may mail in Form 9465, which can | | | | restructure it so that additional |
| also be found on the IRS website. The | | | | amounts can be combined with your |
| request can be mailed to the address on | | | | current agreement into a new agreement. |
| your notice. | | | | Keep in mind that if you are in an |
| - Taxpayers who owe more than $25,000 | | | | installment agreement with the IRS, tax |
| may also qualify for an installment | | | | refunds owed to you will be applied to |
| agreement. Form 433F, a Collection | | | | the payment amount. The IRS will apply |
| Information Statement, might also need | | | | the refund to amounts owed like taxes, |
| to be completed. Taxpayers are advised | | | | student loans, or child support. |
| to call the number on their notice or | | | | |