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.

 

 

Related Topics

Related Resources

If I never received my state refund from last year, how should I handle the missing state tax refund on this year’s retu

If you filed taxes last year but never received your state tax refund, what should you do? Get the answer from the tax experts at H&R Block.

How can I pay taxes I owe?

Are you confused about how to pay your taxes? Learn about methods for paying taxes you owe from the tax experts at H&R Block.

Quarterly Estimated Tax Payments Due June 15 for Freelancers and Business Owners

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.

I e-filed my return, and it was accepted — I had to amend taxes later though. Will I still get the original refund amou

Learn how filing an amended tax return can impact your refund with help from the tax experts at H&R Block.