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Taxes
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Federal Taxation
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Irs Questions
Managed By: jkepler
Managed Since: 08/31/2009
Views: 11
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Page revenue is subject to change as we obtain data from our partners
Managed Since: 08/31/2009
Views: 11
Money Earned: M$0.05
Page revenue is subject to change as we obtain data from our partners
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Introduction
- The worst thing you can do when it comes to dealing with the IRS is to pretend a problem will go away. It won't. If you can't afford to pay your taxes, you should file your return, and set up an installment agreement with the IRS. The process is quick and easy, and having a plan in place will protect your assets from being seized by the IRS, as long as you make the agreed upon payments.
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Step 1: Prepare Your Taxes
- Prepare your taxes, preferably before the filing deadline. Even if you think you can't afford to pay, you want to have your return prepared and ready to file by the deadline, to avoid being assessed a failure to file penalty which can increase the amount you owe to the IRS by up to 25%.
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Step 2: Determine How Much You Can Pay
- After you've completed your return, take a careful look at your finances, to determine what you can afford.
- The IRS charges interest on unpaid balances. The interest rates are revised quarterly; the rate for individuals is the federal short term bond rate plus 3%.
- File your taxes, including whatever you can pay.
- The IRS will send you a bill, including interest, for the unpaid amount.
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Step 3: Set Up an Installment Agreement
- You can request an installment agreement by filing Form 9465 with your return. You can also apply online, or by phone at 1-800-829-1040.
- There is a fee to set up a payment plan.
- You need to select a monthly payment date that will be fixed for the life of the agreement, and determine the amount you can pay each month.
- The IRS offers direct debit, which ensures your payments will be made on time. If you select direct debit, the fee to set up the agreement will be lower.
- The amount of your payment should be calculated so that the entire debt, including interest, will be paid off within three years.
- If you owe more than $25,000, the IRS will also require form 433F
