I owe $3,000 to the IRS for 2007 taxes, but don't have it. What kind of monthly payment can I expect?

Question

I am wondering how much of a monthly payment I need to plan for if I get a payment plan with the IRS for my 2007 tax bill ($3,000 after they deducted my Stimulus check). I am hoping someone can help me understand what my options are before I have to make the agreement. Thanks!

Answer 1

If you can pay it off within 120 days, you save yourself the $105 one-time installment agreement user fee. If that's not possible, then the minimum monthly payment for that amount is about $50 per month. Obviously, you'll want to pay more if you can in order to minimize penalties and interest.

Answer 2

you have no options, unless you want your wages garnished up to 50% of your take-home pay - you might be able to get a payback over 18-24 months - interest and late penalty will keep accruing, but int is less than 10%

Answer 3

Ask for a payment plan over a period as many months as you can compromise with the IRS agent.  The reasoning:  your income is likely to improve over time and the $3000.00 will not be as difficult to pay.    But, contact the IRS and workout a compromise.  It is better that you contact them than they start a collection effort against you.  It is always best to be proactive with business debt.

Answer 4

Two choices.

1.  120 day extension to pay.  You ask for it, you get it.  At 120 days the computer checks back to see if you still owe for tax, penalties and interest.  If you do, it starts sending letters again.

2.  True installment agreement.  You request it online (at IRS website), by phone or by mail (form 9465).  You pay a $105 fee to set it up and then make monthly payments.  The IRS would expect a minimum of $50/month, preferably by direct debit.  Interest and penalties still apply, but on the declining balance due.

Answer 5

You can get an automatic installment agreement to pay it over five years.  This will require a payment of about $65 per month.

Answer 6

If you know you can full pay the amount within 30 days, 60 days; 90 days or 120 days then contact IRS at 1-800-829-0922 and request the extension to pay. THe customer service rep will calculate the interest to the date you promise to pay.  

IF you can't full pay then either call 1-800-829-0922 and request an installment agreement.  For $3000 balance due divide by either 36 months or 60 months and that will be the minumum payment IRS will accept.  For 60 months the minimum monthly payment will be $50.00, IRS charges a USER FEE of $105.00 if you choose to mail your payment in or $52.00 if you choose Direct Debit Installment Agreement.  

And any and all future refunds will be offset and applied to your debt.  

Interest and penalties continue to accrue while  you have the installment agreeement, if you default IRS will charge you a $45.00 USER FEE to reinstate your installlment agreeement.

And you owe because you didn't have enough taxes taken out of your paycheck, submit a new W4 to your employer and change the amount you have deduct from each paycheck.

Good luck! get on the phone now 1-800-829-0922 or download the form 9465 from the IRS website www.irs.gov