Question

I have a balance due on my return and can’t pay it. Can I set up an IRS payment plan?

Answer

To set up a tax payment plan or tax payment installment agreement is among the more costly options to pay your balance due. You might want to consider other less expensive options, including:

  • Pay by credit card.
  • Borrow from your 401(k).
  • Take out a personal loan.
  • File for a short-term extension — up to 120 days. This option has:
    • No fee
    • Penalty of 0.5% per month on unpaid balance
    • Interest of short-term federal rate plus 3% (interest might change each quarter)
  • Complete IRS Form 1127: Application for Extension of Time for Payment of Tax Due to Undue Hardship.

If you want to request an installment agreement:

  • Request an installment agreement with one of these:
    • Online payment agreement (OPA)
    • Form 9465 — If your liability is more than $50,000, you’ll need to file Form 9465 instead of using the online agreement. You must agree to pay the full amount within three to five years.
  • Pay an application fee of $120 ($52 if you make your payments by direct debit). You might qualify to pay a reduced fee of $43 if your income is below a certain level.

Learn all the steps to take if you can’t pay your taxes.

 

 

Related Topics

Related Resources

What Are the Tax Brackets?

What are the tax brackets for U.S. taxes? Review income tax brackets based on your filing status and taxable income and understand how they apply to you.

Inheritance Tax

Inheritance tax is the tax you pay as the beneficiary of property that you inherited and then you sell. Learn more from the tax experts at H&R Block.

Tax Filing Extension Deadline | H&R Block

Do you need more time to file taxes? Review these time-sensitive tax pro tips to prepare for the tax filing extension deadline. Read more from our pros on the H&R Block blog.

IRS Letter 3179C – Refund Offset to Treasury Offset Program – Nontax Debt

All or a portion of your tax refund was taken to pay non-tax debt. Learn more about IRS letter 3179C from the tax experts at H&R Block.