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An Insight to IRS Payment Plan
The United States Internal Revenue Service (IRS) is a government agency responsible for tax collection and the enforcement of tax laws. At times, individuals and businesses may owe more taxes than they are capable of paying in full at the given time. When this occurs, the IRS offers a solution, in the form of IRS payment plans. These plans are essentially agreements between you and the IRS to pay the taxes you owe over a period.
Here at Brightside Tax Relief, we understand that setting up an IRS payment plan online might seem daunting at first. However, you will soon realize it’s a straightforward process when you grasp the process’s core aspects. Let’s walk you through this process and rivet some essential details in your mind.
The Need for an IRS Payment Plan Online
Everyone encounters financial difficulties at one point or another. It’s no secret that tax obligations can place substantial pressure on your pockets, especially when large sums are involved. IRS payment plans offer a flexible solution, allowing taxpayers to manage their tax debts over an extended period. By spreading out your payments, you can reduce the financial strain and avoid the severe consequences of non-payment, which could include tax liens or levies.
IRS Payment Plans at a Glance
Before you initiate the setup of your IRS payment plan online, let’s first understand the types of agreement available:
– Short-term payment plan: This is applicable if you can settle your tax debts within 180 days.
– Long-term payment plan (Installment Agreement): You’re qualified for this if you need more than 180 days to settle your tax debts.
These plans each have specific qualifications, fees, and conditions. Understanding which plan suits your circumstances best is a crucial move towards getting that weighty tax debt off your back.
Steps to Setting Up an IRS Payment Plan Online
Setting up an IRS payment plan online involves the following:
Step 1: Determine Your Eligibility
Before establishing an online IRS payment plan, it’s essential to confirm your suitability for the desired plan. Individuals owing up to $50,000 in combined tax, penalties, and interest or businesses that owe $25,000 or less can apply for the IRS Payment Plan online.
Step 2: Gather Necessary Information
Before commencing the setup, ensure you have all your necessary tax documents handy. This includes your social security number (or Individual Tax ID Number), tax returns for the previous year, and a source of steady income.
Step 3: Apply for the IRS Payment Plan Online
You can apply for the IRS payment plan online using the IRS Online Payment Agreement Application, located at IRS website.
Step 4: Complete the Payment Agreement
After submitting your application, you’ll need to complete a Direct Debit Installment Agreement (DDIA) if you’re setting up a long-term payment plan.
Step 5: Make Your Payments
Once your application gets accepted, ensure you meet up with your stipulated payments. You can make your payments via check, money order, debit or credit card, or direct payment from your bank account.
Additional Tips
Failure to comply with the terms of your agreement or making late payments could result in a default of your payment plan. Ensure you’re punctual with your payments to avoid tax liens and levies.
Wrap Up
The IRS payment plan online is indeed a lifesaver for anyone who feels overwhelmed with their tax debts. However, navigating this process may still prove challenging, even with the clarity provided. At Brightside Tax Relief, we offer professional guidance and support throughout this process. Navigating tax issues doesn’t have to be a thorny path. With Brightside Tax Relief, it’s always the brighter side.
