Installment Agreements
An installment agreement is a formal arrangement between you and the IRS that allows you to pay off your tax debt in manageable monthly payments rather than in a single lump sum.
Eligibility: Generally, you can apply for an installment agreement if:
- Your Tax Debt is Below a Certain Threshold: As of 2024, you can apply for a streamlined installment agreement if you owe $50,000 or less in combined tax, penalties, and interest.
- You Have Filed All Required Tax Returns: To qualify, all your tax returns must be filed and up-to-date.
- You Are Current with Your Tax Payments: You must be current with all estimated tax payments and have no outstanding tax liabilities.
Eligibility
Generally, you can apply for an installment agreement if:
- Your Tax Debt is Below a Certain Threshold: As of 2024, you can apply for a streamlined installment agreement if you owe $50,000 or less in combined tax, penalties, and interest.
- You Have Filed All Required Tax Returns: To qualify, all your tax returns must be filed and up-to-date.
- You Are Current with Your Tax Payments: You must be current with all estimated tax payments and have no outstanding tax liabilities.
Benefits of Installment Agreements:
Manageable Payments: Breaks down your tax debt into affordable monthly payments, easing financial stress.
Avoid Collection Actions: Helps you avoid more severe IRS collection actions such as wage garnishments or bank levies.
Financial Relief: Provides relief by allowing you to pay off your debt over time without having to come up with a lump sum.
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