Fees for IRS installment plans
If you can pay off your balance within 180 days, it won't cost you anything to set up an installment plan.
If you can't pay off your balance within 180 days, setting up a direct debit payment plan online will cost $31, or $107 if the plan is set up by phone or mail.
If you're not using direct debit, then setting up the plan online will cost $130, or $225 if the plan is set up by phone or mail.
If you're a lower-income taxpayer, you may be able to reduce these fees.
Balance of $10,000 or below
If you owe less than $10,000 to the IRS and are financially unable to pay the full amount when it's due, your installment plan will generally be automatically approved as a "guaranteed" installment agreement. Under this type of plan, you must agree to pay off your balance within three years.
However, during the past five tax years, you (and your spouse if filing a joint return) must have timely filed all your tax returns and paid any income tax due. You also can't have other existing installment agreement with the IRS.
Balance between $10,000 and $50,000
With a balance due above $10,000, you can qualify for a "streamlined" installment plan. With a streamlined plan, you generally have 6 years (72 months) to pay. If you owe $25,000 to $50,000, you must agree to pay by direct debit or payroll deduction.
While acceptance isn't guaranteed, the IRS doesn't usually require additional financial information to approve these plans. However, if you can't pay an amount equal to what you owe divided by 72, you will need to complete Form 433-F unless you qualify for an exception.
Balance over $50,000
Qualifying for a plan with a higher balance due requires additional information. For instance, you must use Form 9465 to apply (i.e., you can't apply online or by phone). You also must file Form 433-A, where you'll have to provide detailed information on your investments, assets, income, employment, bank accounts, and more.
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FAQs
You have 72 months (6 years) to pay your tax debt. However, it can also offer 84-month terms. The minimum monthly amount you will pay is also found by dividing your total debt by 72. Besides, the IRS won't put a lien if you have a streamlined installment agreement.
What is the minimum payment for the IRS installment plan? ›
The IRS will ask you what you can afford to pay per month, encouraging you to pay as much as possible to reduce your interest and penalties. If you choose not to answer or let the IRS pick a payment amount for you, your minimum payment will typically be set to the amount you owe divided by 72.
Can I make small payments to the IRS? ›
Payment options include full payment, short-term payment plan (paying in 180 days or less) or a long-term payment plan (installment agreement) (paying monthly).
How much does an IRS installment agreement cost? ›
$130 setup fee to apply online. $225 setup fee to apply by phone, mail or in person. $43 setup fee for low-income taxpayers; may later be reimbursed.
What is the minimum amount for IRS? ›
Tax year 2023 filing thresholds by filing status
| Filing status | Age at the end of 2023 | A person must file a return if their gross income was at least: |
|---|
| Single | Under 65 | $13,850 |
| Single | 65 or older | $15,700 |
| Head of household | Under 65 | $20,800 |
| Head of household | 65 or older | $22,650 |
6 more rowsMar 7, 2024
Call the IRS immediately at 800-829-1040. Options could include reducing the monthly payment to reflect your current financial condition. You may be asked to provide proof of changes in your financial situation so have that information available when you call.
Can I pay the IRS in monthly installments? ›
Your specific tax situation will determine which payment options are available to you. Payment options include full payment, a short-term payment plan (paying in 180 days or less) or a long-term payment plan (installment agreement) (paying monthly).
How are IRS payment plans calculated? ›
The IRS offers two types of streamlined installment agreements: one for those who owe $25,000 or less and another for those who owe between $25,000 and $50,000. Both types of streamlined agreements run for up to 72 months and have a minimum payment calculated by dividing the number of months covered by the agreement.
How long do I have to pay the IRS? ›
Each year, your tax is due by the filing deadline even if you get a filing extension. The filing deadline for 2023 tax returns is April 15, 2024.
Who qualifies for the IRS fresh start program? ›
General Initiative Eligibility
You should be current on all federal tax filings and owe no more than $50,000 in back taxes, interest and penalties combined. If you're a small business owner, you could be eligible for relief under the Fresh Start Initiative if you owe no more than $25,000 in payroll taxes.
You could pay less in interest and fees: With IRS payment plan interest rates at 8% and the lower penalty rate of 0.25% per month, it's possible that you'll have lower ongoing costs by repaying this way than if you borrowed the money with a personal loan.
How long does it take the IRS to accept an installment agreement? ›
When you request an IA using the form, generally, you'll receive a response from the IRS within 30 days notifying you of whether the IA request was approved or rejected. An assigned IRS employee may also contact you and request financial records to verify the amount you've requested to pay.
What is the IRS 6 year rule installment agreement? ›
The six-year rule allows for payment of living expenses that exceed the Collection Financial Standards, and allows for other expenses, such as minimum payments on student loans or credit cards, as long as the tax liability, including penalty and interest, can be full paid in six years.
Do I have to pay the IRS if I owe $1? ›
Taxpayers don't have to pay if balance due is less than $1. Payment in full is due by the April filing due date to avoid interest and penalties. Taxpayer should file his or her return by the filing due date, including extensions to avoid a failure-to-file penalty.
How much money can a 70 year old make without paying taxes? ›
For retirees 65 and older, here's when you can stop filing taxes: Single retirees who earn less than $14,250. Married retirees filing jointly, who earn less than $26,450 if one spouse is 65 or older or who earn less than $27,800 if both spouses are age 65 or older. Married retirees filing separately who earn less than ...
What are typical IRS payment plans? ›
There are two types of Streamlined Installment Agreements, depending on how much you owe and for what type of tax. For both types, you must pay the debt in full within 72 months (six years), and within the time limit for the IRS to collect the tax, but you won't need to submit a financial statement.
Can you pay off IRS installment plan early? ›
There's no penalty for paying off your IRS payment plan early. In fact, if you pay tax debt quickly, it's likely the installment plan fee will be waived. You can avoid the fee by paying the full amount within 120 days.
How many payments can you miss on a IRS installment agreement? ›
If you're in a streamlined installment agreement, meaning you owe less than $50,000 and can pay within 72 months, you can miss 1 payment a year without default. For most other payment plans, 1 missed payment equals a default.
