1-800-548-4639If you cannot pay your taxes in full, the IRS provides the option of setting up a payment plan, known as an installment agreement, for that tax year. However, if you encounter a similar situation before your current agreement ends, you will not be able to establish another installment agreement without risking the terms of your existing one. So, typically, you cannot have multiple installation agreements with the IRS.
At BC Tax, we’re happy to work with you to explore your installment agreement options so you can pay your tax debt while following all rules and regulations.
What Is an Installment Agreement?
An installment agreement is a tax payment plan with the IRS. Generally, our tax experts will only recommend an installment agreement if you can’t pay your tax debt in one payment.
Installment Agreement Options
Since every taxpayer has different financial needs, there are several installment agreement options:
- Guaranteed Installment Agreement: For taxpayers who owe less than $50,000 before penalties and interest and can pay their balance in four months.
- Streamlined Installment Agreement: For taxpayers who owe less than $50,000 and can pay their entire balance in six years. You may have to pay a setup fee based on your monthly payment method, but this agreement does not result in a federal tax lien.
- Partial Payment Installment Agreement: For taxpayers who can’t pay their entire tax balance in six years. If you qualify, you must undergo a financial review every two years, and any financial changes may modify or terminate your contract.
- Non-Streamlined Installment Agreement: For taxpayers who owe more than $50,000. They must complete Form 433-F to qualify and suggest a desired monthly payment amount.
Can I Add Tax Owed to an Existing Installment Agreement?
You must pay taxes for the next filing period, even with an installment agreement. If you want to add another year’s taxes to your current installment agreement balance, you must request an amendment before the IRS assesses a new tax balance.
How to Make Changes to an IRS Payment Plan
To change your IRS payment plan, decide whether you want to adjust your monthly payment or due date or convert to a direct debit agreement. Once you determine which would be most beneficial:
- Visit the IRS website and log into your account.
- Select view or change your existing agreement.
- Follow the prompt to update your agreement.
If you cannot access your online account, you can complete Form 9465 and mail it to the IRS or call the IRS customer service line. You must still make payments for your installment agreement until the IRS approves your request.
Navigate Your Options With BC Tax
Navigating installment agreement options can be challenging, especially if you’re unsure which is most financially beneficial. Luckily, the experts at BC Tax are here to help and will walk you through your options so you can decide which would be best for your needs. Contact us today to start your journey toward tax debt relief.
Authored by the BC Tax Insights Team, this article reflects the collective expertise and experience of our seasoned tax professionals. The Insights Team at BC Tax comprises specialists with a deep understanding of various tax scenarios and solutions. With a focus on providing informative, accurate, and practical insights, our goal is to guide readers through the complexities of taxation and financial planning. Every piece is crafted with the intent to help individuals and businesses navigate the ever-evolving world of taxes, ensuring clarity and confidence in decision-making.
