Comments on: Tax payments?

Question: Tax payments?

ryanissuper — Sat, 04 Feb 2006 09:39:22 -0800

There is no way I can afford to pay my taxes in one shot this year. Is there a way to set up a payment pan with the IRS?

By: sourwookie

sourwookie — Sat, 04 Feb 2006 09:46:30 -0800

Ran into the same problem last year myself (Though I have a day job that withholds, I have such an active performance schedule combined with my freelance column writing that stack of 1099's really ends up biting me in the ass.)

I file my taxes using Turbotax software, and at the end it gave me the option to print a form to send to the IRS requesting such a plan.

I printed it, sent it in (with a money order for an initial payment). They sent back a letter saying they approved and I payed them over the course of several months.

By: Hankins

Hankins — Sat, 04 Feb 2006 09:51:17 -0800

Installment Agreements. Use Form 9465 (pdf) if you owe less than $25k. Fill it out, send it in, you'll get a letter back letting you know they approved it. You can set up monthly automatic transfers from a bank account as well.

By: sourwookie

sourwookie — Sat, 04 Feb 2006 09:54:09 -0800

That was the form!

By: Miko

Miko — Sat, 04 Feb 2006 10:04:18 -0800

I did that a few years ago, when I was painfully broke, to pay a tax bill of about $900.

I found that when I negotiated with an IRS agent on the phone about my payments, they pressed me for much bigger installments than I could afford. I had to repeat many times "I can send you X dollars a month, at maximum." They had a number of tactics to respond with, such as "Is there a friend or family member from whom you could take a loan? Are there assets you can sell? Can you take a second job?" etc. I found I had to be pretty firm in answering 'no' to all of those probing questions.

So, if you need to do a phone consultation, be prepared to work with them, but do have in mind what your maximum monthly budget will allow you to pay without hardship to yourself. They're going to ask for the most they can get.

By: JamesMessick

JamesMessick — Sun, 05 Feb 2006 12:26:17 -0800

I had to do this about 16 years ago. I went into the local IRS office and asked about it. The lady was very nice, but they do charge you a high interest rate. Not VISA high, but high enough. Come up with the money if you can, but not from VISA/MC.

By: COBRA!

COBRA! — Mon, 06 Feb 2006 07:23:12 -0800

In a similar situation, I wound up going to my bank and taking out a signature loan for the amount I owed (I made a mistake on my taxes one year and, six months into the next year, got a letter from the IRS wanting a thousand bucks). Doing it that way gave me a better interest rate and more flexibility for payments.

By: BigLankyBastard

BigLankyBastard — Mon, 06 Feb 2006 13:33:14 -0800

I second COBRA!'s advice - what you need is not necessarily credit from the IRS, but credit, period. I have no first-hand experience, but I'll wager JamesMessick is right, and you can save money by getting a proper loan from your bank/credit union. The bank will also be a lot less likely to give you the third degree when you go to them. If you are in the US and have a decent credit rating, you can likely immediately pay off the bank loan with a credit card 0% balance transfer. Just get that paid off before the rate expires...