I have a balance due on my return and can't pay it. Can I set up an IRS payment plan?
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.
Need to make sure the IRS got your check? Learn how you can confirm if the IRS received your payment from the tax experts at H&R Block.
If you’re a small business veteran, you know that in addition to filing an annual tax return, you will likely make quarterly estimated tax payments.
Can you file your state and federal tax returns on different dates? Learn more from the tax experts at H&R Block.
What happens if you can’t pay your taxes on time? Learn more about late payment penalties and installment agreements from the tax experts at H&R Block