Tech to the Rescue: How Online Resources Can Simplify IRS Payment Plans

The financial security is not predictable and can land you in some serious trouble. One of them is overdue of the tax and this situation can cost you heavy penalties. In this hard time, the best is to consider IRS payment relief plans, as it has numerous plans available that can go along with your condition. But you might not be sure about it. 

So to prevent getting your unpaid tax bills larger over time, read the article to learn what it exactly means, how it works and how to set up the remuneration plans. 

IRS Payment Plans: An Overview 

An IRS Payment plan allows you to reconsider your remaining tax dues with strategic repaying plans. The payment plans allow paying the dues in monthly installments over a certain period to lessen the fear of paying all in one go. However, the penalties will not be protected by the agency. 

In addition, the IRS offers different types of plans, that directly depend on the amount left and how quickly you are willing to pay your remaining dues. Depending on the plans you opt for, the time extension will range between 180 days to 72 months. 

How do the IRS Payment Plans Work? 

Now that you know the concept of the IRS payment plan, let’s move on to the prime part, which includes how it works. So basically, there are two types of options offered by the IRS, short-term and long-term agreements. Let us understand both in detail. 

Short-Term Plans 

The short-term plans give the liability to the taxpayers, extending their period by 180 days. This option works best for taxpayers who have an amount less than $100,000. Hence, the individual taxpayers mainly opt for this option. 

Long-Term Plans 

The long-term plans, formerly known as installment agreements, give more than 180 days and less than 72 months to clear their debts and penalties altogether. The option remains suitable for taxpayers who have an outstanding debt of less than $50,000 combined with penalties and interests. 

Business Payment Plans

This plan is suitable for the taxpayer with less than $25,000 remaining amount, combining all the penalties and interests. In addition, you get an extension of up to 24 months to clear your debts.

Before considering any plans, it is advised to take a deep analysis of your remaining amount, your financial status and the estimated time you need to clear it. 

How to Set Up IRS Payment Plan? 

In the condition where you meet the eligibility criteria of the IRS payment plans, the next step is to look for the set-up process of your plan. There are two ways by which you can apply for the IRS payment plan, online mode and offline mode. 

Online Application Process 

You can easily apply for the IRS payment plan through the authentic portal and fill out all the necessary information correctly. To apply online, the information that should remain handy includes the full name, valid email address and residence address, date of birth and mainly the tax ID number. 

Along with all this, all the information you are going to submit should be identical to the documents of the tax papers. Hence, opting for direct debit options can be cost-effective. 

Offline Application Process 

Somehow if you miss out on being eligible for the online application process, don’t worry, you can fill out the form offline and contact the concerned authority to know the further process. However, it is worth noting that the offline method can be time-consuming and end up setting higher consultant fees. 

The process you’re provided for IRS payment plans depends on your tax history, remaining amount and other factors. 

Pros and Cons of IRS Payment Plans 

It is better to look for the bright and dark side of the IRS payment plans beforehand, to make an informed decision. 

Despite some drawbacks, the IRS payment plans can rescue in crucial financial times. 

Conclusion: Manage your IRS Plans 

Undergoing a heavy tax bill is a matter of concern. But with IRS payment plans, you can reform a strategy and smoothly lay down all your remaining debts in the preferred period. IRS payment plans offer the freedom to customize your installment strategies with minimum additional interests and penalties. 

FAQs