IRS Income Tax Payment Plans?
I have done my taxes (just haven’t filed them yet) and I’m going to have to pay about $3500 this year. This is the first year I have ever had to pay taxes (I generally would get a small refund), so I’m not sure about paying this.
I do not have the money to pay this and do not have available credit on a credit card to pay this either. We have had a really rough year financially, and this is probably only going to make our situation that much worse. So, I’m just trying to figure everything out to ensure that I can even afford to pay back on a payment plan!
Can anyone tell me about how the IRS payment plans are? I mean, for $3500, how much in a monthly payment would I be looking at roughly? I hate the thought of owing the IRS anything, but I feel like I have no other choices. Just need my mind to be assured that it’s going to be ok and the IRS isn’t going to be stalking me until this is paid.
What is the best way to handle this?
I owe the $3500 because I was laid off from my job and at the same time had a family emergency that required a significant expense, so I had to cash out my 401K (which is why I have to pay taxes this year).
This shouldn’t be a problem at all for next year.
I can do $60/month but not a lot more than that, and definitely not over $100. I wasn’t sure how high the interest would be and if it wuold inflate the payments too much.
I thankfully was only without a job for a few weeks before being offered my current job. My fiance has been having trouble with work (self-employed General Contractor) for the past year himself though, so it’s just been really tight.
Paying the taxes back wasn’t going to be a problem because we were going to be receiving a bonus in March of this year, so I was just going to pay them completely off with that. However, with the economy being so bad…I don’t believe that we will be getting those bounses, and if so, they will be considerably less and we don’t know when/if they will be paid out. So, I’m trying to get prepared with my options, under the assumption that I’m not getting this bonus (or winning the lottery – LOL!)
January 9th, 2010 at 6:36 pm
Too many of us are going to have to face the fact that all this “bailout” foolishness has to be paid by somebody, and it’s a cinch low/no income folks are not going to share the burden. Neither is bankrupt financial pits and dieing union infested car companies. Those who work and struggle to keep their bills paid are being asked to pay mortgages for those who have gone over their heads with no hope of ever paying their obligations. We are being forced to rescue those who will relapse into default as soon as the subsidies end, then where do they get the next handouts? This superficial patch is more democrat BS that pushes the problem into the future and does nothing to address the fundamental problem. If this kind of socialist idiocy keeps up I’m going to consider joining those who are beginning to demand some personal accountability from our politicians. Either get real or get out. This bloated system we’ve allowed to develop is already taking as much as a third (combined federal state and local) of what honest workers earn, to support those who refuse to support themselves. Enough is enough.
January 9th, 2010 at 11:00 pm
$3500? You need to adjust something, either withholding or make estimated tax payments, starting now for next year.
For $3500, the IRS will accept any offer for installment payments that will pay off in five years or less. Since you owe over $1000, you will get a under-payment penalty, and of course interest will accrue the whole time you are paying it off. The IRS will charge you $105 to set up the payment plan.
So file your taxes, pay as much as you can afford, to cut down penalties and interest, and offer to do an installment agreement. After you file, you can do this online http://www.irs.gov/individuals/article/0,,id=149373,00.html or send in Form 9465, either with your taxes or separately.
But be sure to account for estimated tax payment for 2009, too, in your plan, if you think you will owe also for 2010.
Edit:
OK, no estimated payments needed.
If you cannot afford $60/mo. (more would be better), you may need to speak to someone at the IRS (they will send you a letter with a contact number when they assess your tax) to make less payments a month, or put it in a “hardship” status. If you are unemployed now, that may be necessary.