Installment Agreement
Resolve Tax Debt with an Installment Agreement With Priority Tax Relief
Facing a large tax bill can be overwhelming, especially if you are unable to pay the full amount owed by the due date. An installment agreement is a provision by the IRS that allows taxpayers to pay their tax debt over time through manageable monthly payments. This article will explore what installment agreements are, how to prevent tax debt, and how Priority Tax Relief can assist.
What is an Installment Agreement?
An installment agreement is a payment plan offered by the IRS that allows taxpayers to pay off their tax debt over an extended period. Instead of paying the entire amount owed at once, taxpayers can make regular monthly payments until the debt is fully paid. There are several types of installment agreements:
- Short-Term Payment Plan: For individuals who can pay their tax debt in full within 120 days.
- Long-Term Payment Plan (Installment Agreement): For individuals who need more than 120 days to pay their tax debt. This plan requires monthly payments.
- Partial Payment Installment Agreement: For individuals who cannot afford to pay their tax debt in full but can make smaller, more affordable monthly payments.
How to Apply for an Installment Agreement
To apply for an installment agreement, you can:
- Online Application: Use the IRS Online Payment Agreement tool to apply for a payment plan.
- Form 9465: File Form 9465, “Installment Agreement Request,” with the IRS.
- Call the IRS: Contact the IRS directly to discuss payment plan options and set up an agreement over the phone.
Criteria for Installment Agreements
To be eligible for an installment agreement, taxpayers generally need to meet the following criteria:
- Current Tax Returns: All required tax returns must be filed.
- Current with Estimated Tax Payments: If applicable, estimated tax payments for the current year must be up to date.
- Within Debt Limits: The total amount owed must typically be less than $50,000 for individuals and $25,000 for businesses.
Preventing Tax Debt
While installment agreements offer a way to manage tax debt, preventing it from arising in the first place is the best approach. Here are some strategies to help avoid tax debt:
- Accurate Withholding: Ensure that your employer withholds the correct amount of tax from your paycheck to avoid underpayment.
- Estimated Tax Payments: If you are self-employed or have other income not subject to withholding, make regular estimated tax payments throughout the year.
- Timely Filing: Always file your tax returns on time to avoid late filing penalties.
- Budgeting for Taxes: Set aside money throughout the year to cover your tax liability.
- Professional Help: Consult a tax professional to ensure accurate tax planning and compliance.
How Priority Tax Relief Can Help With Installment Agreement:
Priority Tax Relief is a tax resolution service that assists taxpayers in resolving complex tax issues, including setting up installment agreements. Here’s how they can help:
- Expert Consultation: They provide expert consultation to assess your situation and determine the best payment plan option.
- Application Assistance: Priority Tax Relief can assist in preparing and submitting your application for an installment agreement, ensuring all necessary information is accurately reported.
- Representation: They can represent you before the IRS, handling communications and negotiations on your behalf.
- Preventative Strategies: They offer guidance on how to prevent future tax debt through proper tax planning and compliance.
Contact Priority Tax Relief at 888-708-2872 to learn more about Installment Agreement and schedule a consultation.
Cancellation: Any cancellation of services must be made in writing and delivered to 400 S. Jefferson, Suite 100, Spokane, WA 99204 within three business days of the date of this agreement. If the client cancels services during this time, Company, reserves the right in its sole discretion to convert the agreed fee payment structure to an hourly one by which Client agrees to pay Company an hourly rate of five hundred fifty dollars an hour, entitling Client to a refund of up to fifty percent of all monies paid beyond the ten day money back guarantee in cases where no aggressive collection action is in place.
Frequently Asked Questions: Installment Agreement
What is an installment agreement?
An installment agreement is a payment plan offered by the IRS that allows taxpayers to pay off their tax debt over time through manageable monthly payments. Instead of paying the entire amount owed at once, taxpayers can make regular monthly payments until the debt is fully paid.
What types of installment agreements are available?
There are several types of installment agreements:
- Short-Term Payment Plan: For those who can pay their tax debt in full within 120 days.
- Long-Term Payment Plan (Installment Agreement): For those who need more than 120 days to pay their tax debt, requiring monthly payments.
- Partial Payment Installment Agreement: For those who cannot afford to pay their tax debt in full but can make smaller, more affordable monthly payments.
How do I apply for an installment agreement?
You can apply for an installment agreement by:
- Using the IRS Online Payment Agreement Tool: Apply online through the IRS website.
- Filing Form 9465: Submit Form 9465, “Installment Agreement Request,” with the IRS.
- Calling the IRS: Contact the IRS directly to discuss payment plan options and set up an agreement over the phone.
Who is eligible for an installment agreement?
To be eligible for an installment agreement, taxpayers generally need to:
- Have filed all required tax returns.
- Be current with estimated tax payments, if applicable.
- Owe a total amount of less than $50,000 for individuals and $25,000 for businesses.
What happens if I miss a payment under my installment agreement?
If you miss a payment under your installment agreement, the IRS may terminate the agreement. This can result in the full amount of your tax debt becoming due immediately, and additional penalties and interest may be applied. It’s important to contact the IRS as soon as possible if you anticipate missing a payment.
Can I modify my installment agreement if my financial situation changes?
Yes, you can request a modification to your installment agreement if your financial situation changes. This may involve adjusting the monthly payment amount or extending the payment period. Contact the IRS to discuss your options and submit a request for modification.
Will an installment agreement stop IRS collection actions?
Yes, entering into an installment agreement generally stops IRS collection actions such as levies and garnishments, as long as you comply with the terms of the agreement and make your payments on time. However, any existing liens may remain in place until the debt is fully paid.
How can Priority Tax Relief assist with installment agreements?
Priority Tax Relief can assist by:
- Providing Expert Consultation: Assessing your situation and determining the best payment plan option.
- Application Assistance: Preparing and submitting your application for an installment agreement, ensuring all necessary information is accurately reported.
- Representation: Representing you before the IRS, handling communications and negotiations.
- Offering Preventative Strategies: Providing guidance on how to prevent future tax debt through proper tax planning and compliance.