If you owe taxes to the IRS but can`t pay the full amount in one lump sum, you may be eligible to set up a payment plan known as an installment agreement. This allows you to pay the amount owed in regular, manageable payments over time. Fortunately, the IRS has made it easy to make installment payments online. Here`s how to do it:
1. Create an online account with the IRS.
The first step to setting up an installment agreement and making online payments is to create an account with the IRS. You can do this by visiting the IRS website and clicking the “Create an Account” button. Follow the prompts to enter your personal information, create a username and password, and answer some security questions.
2. Determine the amount you owe and the payment plan you want.
Before you set up your installment agreement, you`ll need to know the total amount you owe and how much you can afford to pay each month. The IRS offers several payment plans, including:
– Short-term payment plan, which allows you to pay the full amount owed within 120 days.
– Guaranteed installment agreement, which is for taxpayers who owe less than $10,000 and can pay the full amount within three years.
– Streamlined installment agreement, which is for taxpayers who owe less than $50,000 and can pay the full amount within six years.
– Partial payment installment agreement, which is for taxpayers who can`t afford to pay the full amount but can make smaller payments over time.
Once you`ve decided on a payment plan, you`ll need to fill out Form 9465, Installment Agreement Request, which can be found on the IRS website.
3. Set up automatic payments.
Once your installment agreement is approved, you can set up automatic payments online. To do this, log into your IRS account and click on the “View Payment History” button. From there, click on “Pay Installment Agreement” and follow the prompts to set up automatic payments using your bank account information.
4. Make manual payments if necessary.
If you prefer to make manual payments instead of setting up automatic payments, you can do so by logging into your account and clicking on “View Payment History.” From there, click on “Pay Installment Agreement” and follow the prompts to make a one-time payment.
In conclusion, setting up an installment agreement and making payments to the IRS online is quick and easy. By following the steps outlined above, you can stay on top of your tax debt and avoid additional penalties and interest charges.