The topic of taxes can be confusing and overwhelming for many individuals, especially when it comes to making payments to the IRS. One important question that taxpayers may have is the minimum payment the IRS will accept. Knowing the minimum payment amount can help individuals better plan for and budget their tax payments and avoid penalties and interest. In this blog post, we will explore the different payment plan options available through the IRS, the minimum payment amounts required for each plan, and tips for making payments on time and in full. Understanding this information is crucial for taxpayers to stay in compliance with IRS regulations and avoid any potential financial consequences.

What Are The IRS Payment Plans?

Struggling to pay your taxes on time? The IRS offers multiple payment plan options to help individuals manage their tax debt. These include:

Short-Term Payment Plan:

Considering the amount of taxes due and your ability to pay within 120 days, individuals can access a "temporary delay of payment" plan. To apply for this short-term payment agreement, you may use the Online Payment Agreement tool on the IRS website or complete Form 9465 - Installment Agreement Request. Now you don't have to worry about hefty payments!

Long-Term Payment Plan:

This plan, also known as an "installment agreement," allows taxpayers to make payments over a longer period of time, typically up to 72 months. Eligibility for a long-term payment plan is based on the amount of taxes owed and the taxpayer's ability to pay over an extended period. To apply for a long-term payment plan, individuals can use the Online Payment Agreement tool on the IRS website or fill out Form 9465, Installment Agreement Request.

Offer in Compromise:

This pact between the taxpayer and the IRS allows for a resolution to be reached where the full debt owed is not required to be entirely paid off. Eligibility for an offer in compromise is based on the taxpayer's ability to pay, income, expenses, and asset equity. Taxpayers must submit Form 656, Offer in Compromise, and a non-refundable fee and initial payment.

It's important to note that, regardless of the plan you choose, you will be charged a fee and you will also be charged interest and a penalty on the unpaid taxes. Also, if you don't make payments as per the agreement, your agreement may default and IRS may take collection action.

It's important to research and understands the eligibility criteria and requirements for each plan before applying, and to work with a tax professional or accountant if needed.

What Is The Minimum Monthly Payment The IRS Will Accept?

The minimum monthly payment the IRS will accept for a long-term payment plan, also known as an installment agreement, is generally determined by dividing the total amount of taxes owed by the number of months remaining before the collection statute expires (usually 72 months maximum).

However, suppose an individual is unable to pay this minimum amount. In that case, they may qualify for an exception by completing Form 433-F, Collection Information Statement. Form 433-F is a detailed financial statement that the IRS will use to determine the minimum monthly payment the individual can afford based on their income, expenses, and assets.

It is important to note that even if an individual is on a payment plan, they may still be subject to penalties and interest on unpaid taxes. It is crucial for taxpayers to make at least the minimum payments on time and keep the IRS updated about their current financial situation to avoid any potential penalties.

Tips For Making Payments

Set Up Automatic Payments: 

 Never miss a payment again with automatic bank account deductions! Setting this up is simple and ensures that all payments will be made on time and in full.

Use The Electronic Federal Tax Payment System (EFTPS):

The U.S. Department of Treasury offers a free, secure Electronic Federal Tax Payment System (EFTPS) to facilitate the payment of taxes for taxpayers everywhere – providing an easy and convenient alternative way to pay your taxes on time!

Use The IRS Direct Pay:

IRS Direct Pay offers a convenient, free way to pay taxes straight from your checking or savings account! There's no easier way to keep on top of tax payments.

Use A Credit Or Debit Card:

You can also make payments by credit or debit card through authorized payment processors. However, be aware that there will be a convenience fee for this service.

Mail Your Payments:

If you prefer to mail your payments, make sure to mail them to the correct address and allow enough time for them to reach the IRS before the due date.

It's important to keep in mind that if you're unable to make the full payment, make sure to pay as much as you can to reduce the amount of interest and penalties. Also, keep in mind that the IRS offers payment plan options for those who cannot pay the taxes they owe in full.

By adhering to these tips, you can insure that all payments are made on time and in full, evading any unnecessary interest fees and penalties.

The Bottom Line:

In conclusion, understanding the minimum payment the IRS will accept is an important aspect of managing your taxes. As a taxpayer, it is crucial to know the different payment plan options available through the IRS, including short-term, long-term, and installment agreements, as well as the eligibility criteria and how to apply for them.

The minimum monthly payment the IRS will accept for a long-term payment plan is generally determined by dividing the total amount of taxes owed by the number of months remaining before the collection statute expires. However, if you are unable to pay this minimum amount, you may qualify for an exception by completing Form 433-F.

It's also important to make payments on time and in full to avoid penalties and interest. Tips such as setting up automatic payments, using the Electronic Federal Tax Payment System (EFTPS) or the IRS Direct Pay, using a credit or debit card, and mailing your payments can help you to make sure that your payments are made on time and in full.

If you are struggling to make your minimum payment, it is important to contact the IRS and explore the different payment plan options available. Additionally, consider seeking the help of a professional tax resolution company like Ideal Tax. With their in-depth knowledge and expertise of the convoluted tax system, they are equipped to assist you with finding the optimum solution for your individual situation.