IRS payment plan online is significantly helpful for taxpayers especially for individuals having difficulties making lump sum payments. If you’re one of those individuals, then the IRS installment plan is a great tax relief option for you. Through IRS online services, you can now conveniently apply and monitor your payment plans. Read on to learn more about IRS payment plan online agreements.
The Basics of IRS Payment Plan Online
In this article:
- Check The Qualifications
- Filling Out the Online Application Form
- Choosing a Payment Plan
- Benefits of Applying for IRS Payment Plan Online
- Changing Your Online Payment Agreement
Check The Qualifications
Whether you are an individual or managing a business, you can apply for an IRS payment plan agreement upon meeting certain requirements.
- You owe less than $100,000 in combined tax, interests, and penalties for short-term payment plans.
- You owe $50,000 ($25,000 for business) or less in combined tax, interests, and penalties for long-term installment agreement plan.
- Make sure that all required returns are filed before application.
Filling Out the Online Application Form
Applying for an IRS payment plan online is easy. Using the web payment plan tool, you just need to supply the IRS online payment plan form with the following.
- name and address (make sure to supply this exactly as it appears on your most recently filed tax return)
- valid e-mail address
- date of birth
- your filing status
- Social Security Number (and spouse’s if filed jointly) or Individual Tax ID Number (ITIN)
Choosing a Payment Plan
Pay Now – you can make payment in full today without paying any setup fee or future interests and penalties.
Short-Term Payment Plan – you can make automatic payments by check, from checking account, money order, or debit/ credit card without paying for any setup costs within 120 days. However, you also need to settle accrued interests and penalties until the balance is paid in full.
Long-Term Payment Plan – you can make automatic payments from your checking account for more than 120 days. This is also known as the Direct Debit Installment Agreement (DDIA). In addition to the monthly payment, you also need to settle the $31 setup cost ($149 for non-direct debit payment plans) and accrued interests and penalties until the balance is paid in full.
Benefits of Applying for IRS Payment Plan Online
Applying for an IRS payment plan via phone, mail, or in person may require higher set-up costs. Online application thus allows you to save more money. Aside from financial savings, one of the many benefits of online payment plan application is it allows you to save time, too. Upon submission of an application, you will be immediately notified whether your payment plan is approved or not. It’s also more convenient as you can instantly view the details of your current payment plan. You can log in anytime at the Online Payment Agreement tool where you can view the type of agreement, due dates, and the amount you need to pay.
Changing Your Online Payment Agreement
Aside from being able to view your online payment agreement at any time, you may also update or revise your payment plan. If your payment plan is under a non-direct debit agreement, you can change the following using the online tool.
- monthly payment amount
- monthly payment due date
- convert an existing agreement to a direct debit agreement
- re-institute your payment plan after default (note that you may incur reinstatement fee)
Are you qualified for an IRS payment plan? Learn your options by watching this video from Gregory Law Group, PLLC:
Going through financial difficulty is a reality most people can not escape. And when paying taxes become more difficult than we expect, the government certainly does offer this kind of tax relief to help us lessen our worries. Make sure to learn about this service so you can take advantage of payment plans if and when the need arises.
Have you used the IRS Payment Plan Online before? Share your experience with us in the comments section below.