From CBS News — By —
Tax season can be complicated, and for many people, the biggest concern on April 15 each year is not just how much they owe, but how long they have to pay. After all, millions of Americans find that they owe more on their taxes than they can immediately afford to pay out of pocket each year, but a delinquent tax bill can have serious consequences, including penalties, interest and legal ramifications. So, understanding your payment options is crucial if you find yourself in this situation.
Luckily, while the Internal Revenue Service (IRS) might seem intimidating, it offers several options to help taxpayers manage their tax liabilities without facing extreme financial hardship. So, there can be more flexibility than you’d expect for taxpayers who communicate their situation and take steps to resolve their balances, whether they need a short extension or a long-term payment plan. But what exactly are the timeframes the IRS provides for tax payments — and what can you do if you find yourself falling behind?
The IRS offers several tax debt payment options
The IRS offers several different timelines for paying your tax debt, depending on your specific situation and how much you owe. The most straightforward option is a 120-day extension, which doesn’t require any setup fees and can be arranged through a simple phone call or online request. This short-term payment plan is available for taxpayers who owe less than $100,000 in combined tax, penalties and interest.
For those who need more time, the IRS offers long-term installment agreements that can stretch up to 72 months. These agreements are available for individuals who owe $50,000 or less in combined tax, penalties and interest. If you owe more than $50,000, you may still be able to qualify for a payment plan, but you’ll need to provide detailed financial information and may need to work with the IRS to determine an appropriate payment schedule.
It’s important to note that even if you set up a payment plan, interest and some penalties will continue to accrue until your balance is paid in full. However, these charges are typically much lower than what you’d pay using credit cards or personal loans to pay your tax debt.
…
Need tax help? Contact the CPA Advisory Group
If you need help with your 2024 taxes — personal or business — contact the experts at the CPA Advisory Group. Reach us by calling our Columbus offices at (614) 942-1990, sending an email to us at [email protected], or just fill out the Contact form on this website, at cpaagi.com/contact.