Connect with us

Finance

IRS Payment Plan | The Short- and Long-Term | Check If You Qualify

Published

on

IRS Payment Plan | The Short- and Long-Term | Check If You Qualify

IRS Payment Plan | The Short- and Long-Term | Check If You Qualify. The IRS Payment Plan is a vital initiative introduced by the Internal Revenue Service (IRS) aimed at helping individuals and businesses with outstanding tax liabilities. Under this program, eligible taxpayers can settle their owed taxes over an extended period. If you’re one of the thousands of individuals facing tax debt and are considering paying it off in manageable installments, read on to learn more about this option.

Understanding IRS Payment Plans

The IRS offers two distinct payment plans: short-term and long-term. These options are designed to accommodate individuals and businesses with varying levels of tax debt. Here’s a breakdown of the key features:

Short-Term Payment Plan:

    • Applicable to taxpayers owing a combined total of tax, penalties, and interest of less than $100,000.
    • Requires payment completion within 180 days or earlier.
    • No setup fee is charged.

Long-Term Payment Plan:

    • Suitable for taxpayers owing a combined total of tax, penalties, and interest of less than $50,000.
    • Allows for monthly installment payments over an extended period.
    • A setup fee is applicable.

Applying for an IRS Payment Plan

Whether you qualify for a short-term or long-term payment plan, the application process is straightforward and can be done online through the official IRS website, accessible at irs.gov.

  • Short-term plan applicants do not need to pay a setup fee.
  • Long-term plan applicants must pay a setup fee, depending on their chosen payment method: $31 for automatic withdrawal or $130 for non-Direct Debit. Low-income individuals meeting specific criteria may only need to pay $43.
See also  CPP vs OAS | Benefits and Facts To Help You Decide

Payment Plan Eligibility

Eligibility criteria for these two payment plans differ as follows:

  • Short-term Payment Plan: Your combined tax, penalties, and interest must not exceed $100,000.
  • Long-term Payment Plan: Your combined tax, penalties, and interest must not exceed $50,000.

It’s crucial to adhere to the specified deadlines for both plans. Failure to do so can result in substantial penalties and interest charges.

Payment Plan Set-up Costs

The set-up cost for your payment plan is determined by the type of plan you qualify for. Here’s a summary:

  • Short-term Payment Plan: No set-up cost fee is charged.
  • Long-term Payment Plan: If you opt for automatic withdrawal or non-Direct Debit, a set-up cost of either $31 or $130 applies.

You can conveniently make these payments online using your Debit or Credit Card.

How to Apply Online for an IRS Payment Plan

If you meet the eligibility criteria for either a Short-term or Long-term Payment Plan, follow these step-by-step instructions to apply online:

  1. Visit the official website of the Internal Revenue Service at irs.gov.
  2. Under the “How can we help you?” section, click on “Make a Payment.”
  3. Navigate to the “Need More Time to Pay?” section and select “Apply for a Payment Plan.”
  4. Click on “Apply/Revise as Individual.”
  5. Complete your application by tapping on “ID.me Create an Account” and providing the necessary details.

Conclusion

To stay updated on IRS Payment Plan information, consider subscribing to push notifications.

Advertisement
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending