Installment Agreement: A Solution To Your Tax Paying Problems
If you owe the IRS and cannot pay that amount now, an Installment Agreement can be perfect!
As per a survey in October 2021, the average American paid 13.29% of their income in taxes in 2019.
Types of Installment Agreements
The IRS offers four types of Installment Agreements that you can be eligible for. You should only request a payment plan if you cannot pay your taxes in the expected timeframe.
It should always be a last resort for your tax issues. But, why? That is because of the user fee you are liable to pay.
If you are certain, here’s some information on the different monthly payment plans.
Guaranteed Installment Agreement
With this payment plan, there will be no Federal Tax Lien filing against you. However, Qualifying for this will require you to adhere to the following conditions:
- Your total tax debt should be below $10,000, excluding the penalties and interests.
- It would be best to have a clean paying taxes record for five years (filed returns, paid taxes you owned).
- Payment of a minimum monthly plan is needed. It can be calculated with the tax liability, penalties, and interest divided by 30.
- You are not eligible if you have applied for an Installment Agreement in the past five years.
- You are unable to fulfill your tax liability within 120 days of the due date.
- The liability gets paid within 36 months.
Streamlined Installment Agreement
Anyone who can qualify for the Guaranteed program can also be eligible for this one. Even then, here are some of the modified requirements:
- There are two tiers of eligibility:
- Unpaid balance of less than or equal to $25,000
- Unpaid balance between $25,001 to $50,000
- You need to pay the balance within 72 months.
- The payment proposal is greater or equal to the “minimum acceptable payment.”
- You must pay a fee which will help set up the agreement.
Partial Payment Installment Agreement
This program allows the IRS to agree with you to facilitate a partial payment for the liability.
If you want to qualify for this, you need to fill Form 433-F with your financial statements. Moreover, it assesses your income and other living expenditures. After that, the IRS will review the information, verify it, and offer a proper course of action.
They will determine any valuable assets to help pay the debts.
Once your application gets approved, you need to be part of a financial review every twenty-four months. Therefore, this might help you increase the Installment Payments or its termination, depending on the situation.
If you have a debt of $50,000 or more, then this would be a good option. However, it would be best if you negotiated with the IRS and file Form 433-F again.
The IRS will take a few months to review the proposal and consider your eligibility. Ideally, your assets, living expenses, previous debts, income, etc., will determine that. Moreover, they can also reject the application based on failure to cooperate.
Even if you cannot pay the tax liability through this agreement, you must fill out an “Offer in Compromise.”
Note: If you have filed bankruptcy or the IRS has accepted your “Offer in Compromise” request, you will no longer be eligible for Installment Agreements.
- Credit Card
- Electronic Federal Tax Payment System (EFTPS)
- Online Payment Agreement (OPA)
- Direct Debit
- Cheque
- Payroll Deduction
- Money Order
How Does CuraDebt Help with Installment Agreements?
At CuraDebt, we focus on offering expert consultation and assistance for your financial goals. We assess your situation and provide timely advice.
We have been in this business since 1996, and our team consists of qualified representatives who can provide help for IRS tax issues.
So, we know how to request an Installment Agreement. Indeed, our team will walk you through the filing and reviewing processes seamlessly.
You need not worry, as our Tax Team will be with you until your financial worries have dissipated. So, you can reach out to CuraDebt, and we will be here to assist you.
From payment options to choosing agreements, we are going to support you. Feel free to call us at 877-999-0486 to get a free tax consultation.