Filing taxes is always stressful, especially if you discover that you owe taxes to the IRS. However, if you’re like thousands of other taxpayers who can’t pay their taxes in a lump sum, there’s no need to panic. The IRS has various payment options available to help make paying taxes manageable.
If you are dealing with an overwhelming amount of tax debt, let our team at The Blue Law Group help you. Contact our Rancho Cucamonga tax lawyers today at (909) 766-9996!
Figure Out How Soon You Can Pay
Before figuring out which payment options are right for you, you should determine how soon you can pay off your tax debt. Doing so will help you determine which payment method you should opt into. It’s important to note that the IRS charges interest at the rate of .5 to 25 percent of the amount you owe each month in tax debt.
If You Can Pay Within 45 Days
If you determined that you only need a few weeks to collect the money you need to pay your taxes, you could send in a partial payment using Form 1040-V. It is a payment voucher that you can fill out if you can’t pay off your tax debt entirely, but you can in the next few weeks.
If You Can Pay Within 120 Days
If you need more time to fulfill your tax debt, you can request the six-month payment plan. You can fill out Form 1040-V and wait for the IRS to send you a letter telling you how much you owe (including interest). You can call the IRS and request a short-term extension to pay your debt within 120 days.
If you know that 120 days won’t be sufficient to pay off your tax debt, you have other options. Installment agreements are a common payment method taxpayers use to make payments toward their taxes. An installment agreement does come with interest and penalties, but it’s a great option to help people get rid of their tax debt. There are four different types of installment agreements:
- Guaranteed Installment Agreement: If you owe less than $50,000 and have never been in an installment agreement before, a guaranteed installment agreement can give you up to three years to pay off your tax debt.
- Streamlined Installment Agreement: If you owe less than $50,000, a streamlined installment agreement will give you 72 months to pay off your debt.
- Partial Payment Installment Agreement: This is an agreement to pay a partial payment of the taxes owed.
- Non-Streamlined Installment Agreement: If you owe more than $50,000, the non-streamlined installment agreement is the one you need to apply for to make payments.
Offer in Compromise
An offer in compromise is another repayment plan option that can help taxpayers get rid of their debt. With an offer in compromise, you can make an agreement with the IRS to clear your tax debt by paying a fraction of the amount you owe.
It means that the IRS does clear a portion of tax debt with this option. However, getting an offer in compromise isn’t an easy task. You will need the help of an experienced tax attorney to help you get an offer in compromise with the IRS.
Rancho Cucamonga Tax Attorneys
If you can’t pay your tax debt and you don’t know what’s the next step, contact our team at The Blue Law Group. Our Los Angeles tax lawyers have the knowledge, skills, and experience needed to help you resolve your situation. We can analyze your case and help you determine which payment option is best for you. We have helped businesses and individuals throughout Southern California get their tax problems resolved. Let our team help you.
Contact our Los Angeles tax lawyers today at (909) 766-9996 to schedule a case review!