Sometimes, no matter how well we save up for the future, there can be unforeseen life events that can lead us to struggle financially. When combined with an unexpected tax liability, it can really put a financial stress if we lack the capacity to pay our obligation.  

Fortunately, the Internal Revenue Service (IRS) offers a payment plan to those who cannot yet afford to pay their taxes in full. Read on to check if you qualify for an IRS payment plan.  

What is an IRS Payment Plan? 

An IRS payment plan or installment agreement (IA) is an IRS program that allows taxpayers to pay their federal taxes over time. However, it must be noted that interest and some penalties will still accrue until the full amount is paid. Qualified taxpayers may apply for a payment plan via online, telephone, mail, or in-person. 

How to Apply for a Payment Plan? 

The IRS offers two kinds of payment plans: 

1. Short-term Payment Plan  

• This plan gives taxpayers an extra 180 days to pay their taxes.  

• Individuals who owe less than $100,000 in combined tax, penalties and interest may apply online.  

• Has $0 set up cost. 

2. Long-term Payment Plan (Installment Agreement) 

• This plan allows taxpayers to pay in monthly installments for up to 6 years for qualified individuals or up to 2 years for qualified businesses.  

• Individuals who owe $50,000 or less in combined tax, penalties, and interest, and filed all required returns may apply online. 

• Businesses who have filed all required returns and owe $25,000 or less in combined tax, penalties, and interest, may apply online. 

• With set-up fee depending on how you applied for the IA. This fee is waived for eligible low-income earners. 

What to Do if I am Not Eligible to Apply Online? 

If you are ineligible to make an online application, you may still apply for a payment plan by mailing a completed Form 9465, Installment Agreement Request.  

You may also apply by phone, by calling 800-829-1040 for individuals or 800-829-4933 for business, or the phone number on your bill or notice. 

Want to learn more? 

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