![\"IRS](\"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/06\/IRS-installment-payment-plan-on-paper.jpg\")
<\/figure><\/div>\n\n\nPaying your tax bill in installment payments is a good option if you don\u2019t have the cash on hand to pay off your tax debts\u2014and it will help you minimize your penalties and interest on your unpaid tax bill. Ready to dive into the details? Learn how a payment plan for taxes could benefit you if you owe the IRS. Then learn about other IRS installment agreement form information.<\/p>\n\n\n\n
What are IRS payment plans?<\/h2>\n\n\n\n
An IRS tax payment plan is an agreement to pay federal income tax owed over a specified time. You can set up a short- or long-term installment plan:<\/p>\n\n\n\n
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- Short-term payment plan:<\/strong> With a short-term tax payment plan, you pay off tax debt within 180 days. You’ll likely be eligible for a short-term plan if you owe less than $100,000 in combined tax, penalties, and interest.<\/li>\n\n\n\n
- Long-term payment plan:<\/strong> With a long-term installment plan, you have 180 day to ten years) to pay off tax debt. You\u2019re eligible for this payment plan if you owe $50,000 or less in combined tax, penalties, and interest\u2014and have filed all required returns.<\/li>\n<\/ul>\n\n\n\n
You can set up monthly payment using Direct Debt, Direct Pay, money order, credit, or debit card for both methods.<\/p>\n\n\n\n
<\/div>File with H&R Block to get your max refund<\/h3>
\nFile online<\/a><\/div>\n\n\n\nFile with a tax pro<\/a><\/div>\n<\/div><\/div><\/div>\n\n\n\nIRS payment plan fees<\/h3>\n\n\n\n
When you set up an installment plan, the IRS charges interest, penalties, and a setup fee, but the amounts differ based on the payment plan.<\/p>\n\n\n\n
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- Short-term plans:<\/strong> There’s no fee for setting up a short-term plan, but interest and the late-payment penalty continue to accrue until the tax debt is completely paid off.<\/li>\n\n\n\n
- Long-term plans:<\/strong> A setup fee normally applies for long-term payment plans. If you\u2019re a low-income taxpayer, you may qualify to have the fee waived or reimbursed. In addition, if you filed your return on time, the late-payment penalty rate is reduced while an installment agreement is in effect. The late payment penalty accrues at the rate of 0.25% per month, instead of up to 0.5% per month.<\/li>\n<\/ul>\n\n\n\n
How to set up an IRS payment plan<\/h2>\n\n\n\n
You can set up an IRS payment plan by requesting an installment agreement through an online payment agreement (OPA) or by filing IRS Form 9465. Both methods for applying for a tax payment plan have the same outcome\u2014you pay the IRS what you owe\u2014but the process, fees, and eligibility differ.<\/p>\n\n\n\n
What is an IRS Online Payment Agreement?<\/h3>\n\n\n\n
The IRS Online Payment Agreement (OPA) is an online method you can use to set up a payment plan. Use the OPA system if you owe $50,000 or less in total tax, penalties, and interest. OPA shows an immediate decision on accepting your payment plan.<\/p>\n\n\n\n
<\/a>What is IRS Form 9465?<\/h3>\n\n\n\n
Form 9465: Installment Agreement Request<\/em> is a tax form used to request a monthly installment plan if you can\u2019t use the online method, can\u2019t pay the full amount you owe on your tax return, or if your tax bill (including interest and fees) falls in a certain range. <\/p>\n\n\n\n
Use Form 9465 if you have already filed your return and:<\/p>\n\n\n\n
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- Owe more than $50,000 and can pay your tax balance within ten years<\/li>\n\n\n\n
- Owe more than $25,000, and you need to create a direct debit installment agreement<\/li>\n<\/ul>\n\n\n\n
You will get a mailed response if the IRS accepts your payment agreement via Form 9465.<\/p>\n\n\n\n
<\/a>Installment agreement fees, by payment type<\/h3>\n\n\n\n
- Long-term plans:<\/strong> A setup fee normally applies for long-term payment plans. If you\u2019re a low-income taxpayer, you may qualify to have the fee waived or reimbursed. In addition, if you filed your return on time, the late-payment penalty rate is reduced while an installment agreement is in effect. The late payment penalty accrues at the rate of 0.25% per month, instead of up to 0.5% per month.<\/li>\n<\/ul>\n\n\n\n
- Long-term payment plan:<\/strong> With a long-term installment plan, you have 180 day to ten years) to pay off tax debt. You\u2019re eligible for this payment plan if you owe $50,000 or less in combined tax, penalties, and interest\u2014and have filed all required returns.<\/li>\n<\/ul>\n\n\n\n