Connect with us

Hi, what are you looking for?

Finance

Tax Day 2023: IRS Releases Options for Taxpayers Unable to Pay Their Tax Bill

Tax payment day marked on a calendar - April 18, 2023, financial concept. (Photo: Ambassador Advisors)

Tax Day 2023 is fast approaching and some Americans may be unable to pay their tax bill by the deadline. So, the Internal Revenue Service (IRS) offers payment plans to help people meet their obligations.

Certified financial planner and CPA Eric Bronnenkant, the Betterment head of tax, told Yahoo! Finance that it is a typical situation for taxpayers to run into, especially those who do not have enough money when they file a tax return. But the IRS said not to worry as there are multiple options to pay their taxes.

tax form with callculator and glasses (Photo: Freedom Tax Accounting)

IRS Short-term Payment Plan

The deadline for tax day 2023 is on April 18 and one of the options the IRS is giving taxpayers is the short-term payment plan. As per CNBC’s report, taxpayers can pay the amount owed through Direct Pay in which their taxes are paid directly through their checking or savings account. They also have the option to pay via check, money order, or debit/credit card.

Bronnenkant said that the short-term payment plan is only available to taxpayers with less than $100,000 combined tax, penalties, and interest. They do not have to file a formal application and accrued penalties and interest is applicable until the balance is paid in full. Taxpayers have a maximum of 180 days to complete their payment.

They can either register through an online application or by calling the IRS at 800-829-1040 and filing Form 9465 to set up the installment agreement. 

READ ALSO: 4 Warning Signs That An IRS Tax Audit Is Imminent, Including One That Tax Expert Refers To As “Dead Giveaway”

IRS Long-term Application

For those unable to pay off their owed balance in less than 180 days, a long-term payment plan is also an option. Eligible taxpayers owe $50,000 or less in combined tax, penalties, and interest. To avail of this payment plan, they will be required to pay a setup fee of $31 if through automatic withdrawals, and $130 for non-direct debit repayment.

IRS said automatic payments are required for those owed balance of $25,000 for individuals and $10,000 for businesses. Setup fees are a requirement but can be reduced for low-income taxpayers. But those who cannot pay their tax bill may request an Offer in Compromise to allow them to pay less than the owed amount.

READ ALSO: Tax Increases Or A New Retirement Age? Many Directions Could Be Taken In The Social Security Reform Discussion

 

Copyright © 2022 Pro Claimers. Theme by MVP Themes, powered by The Santa Clarita Valley.