Worried you won’t be able to make your tax payments on time? You have the option to request an IRS payment plan in that event. Knowing not everyone could make huge payments all at once, the government made sure there was an option for taxpayers to pay their taxes in installments.
If you would like to request an IRS payment plan, there are a few steps you must take.
First, you need to figure out how much you owe to the IRS. This will determine what steps to take next. Basically, there are two different paths you can walk down. One is if you owe $25,000 or less. The other is if you owe more than $25,000.
If you owe $25,000 or less then you need to fill out IRS form 9465. If you owe more than $25,000 then you still need to fill out form 9465, but you also need to fill out IRS form 433-F.
IRS Form 9465
Requesting an IRS payment plan when you owe less than $25,000 is relatively simple. In fact, if you owe less than $10,000, you should be automatically approved. Simply fill out your personal information, your bank info, and how much you want to pay in each month. The instructional booklet will tell you where to send your form.
Keep in mind your interest rate will be in the neighborhood of 5%. This can lead to a much higher payment than you were expecting. Pay as much as you can to avoid this.
IRS Form 433-F
If you owe over $25,000 to the IRS, you may be in for a tough time. In addition to form 9456, you must fill out the 433-F Form when requesting an IRS payment plan. This includes detailing every bit of your financial information, such as all your bank accounts, your real estate, and your total financial worth.
If you’re complete enough and the IRS does not detect any shady dealings in your financial activities, you should be approved for an IRS payment plan. Again, the address to send this form to is on the instruction form.