Whether you ended up owing a large amount of money to the IRS or simply don’t have the means to pay your IRS bill, having a negative balance on your taxes can be a scary thing.
The very first you should do is figure out why you ended up owing and make changes to your current situation to avoid ANOTHER large bill when you file next years return.
Remember, each month that you don’t pay the full amount comes with a penalty fee and interest added to your balance.
There are, however, several payment options provided by the IRS to help you out of the bind as soon as possible. Here’s how to pay your taxes owed, even if you can’t afford the full amount right now.
Online Payment Agreements
If your tax bill is more than you can pay off in a couple months, consider applying for an Online Payment Agreement installment plan. The agreement allows you to set a monthly amount and a day each month to make your payment. So long as the combination of your taxes owed and any penalties and interest is $50,000 or less, you’re good to go for a long-term payment plan up to 72 months. You may even be able to qualify for a short-term agreement of 120 days if your balance is under $100,000.
All the information you need should be on your most recent tax return: filing status, Social Security Number, address and so on. Just know that there will be a fee to set up the agreement, about $225, which will be added to your total bill and paid over time.