The IRS accepts several types of payments. Direct debit and monthly checks are accepted by the IRS. However, direct debit has a few benefits. With this option, you can set up automatic payments to the IRS. In addition, you can save money on setup fees. Using direct debit avoids the need to write out a check. It also saves you time because you can adjust your payments. You can choose the amount of money you pay each month, which can be as low as $31.
The IRS offers several types of payment plans, including short-term and long-term. Short-term payment plans, for example, give you 120 days to pay off your debt. This plan is suitable for people who owe less than $100,000. Typically, payments can be made by check, debit card, or money order. You can also choose an automatic bank draft. Ultimately, you have to decide if you can afford to pay your tax debt in 120 days.
If you have difficulty paying your taxes on time, you can apply for a tax payment plan with the IRS. These plans are designed to help taxpayers avoid adverse collection activities. They are difficult to qualify for, though, and will consider all available payment sources. Once approved, you will be able to pay the rest of the debt in less time. But make sure you file your taxes on time or risk incurring penalties and interest. Otherwise, you’ll be in hot water and face an additional levy and wage garnishment.
The most popular type of payment plan is the guaranteed installment agreement. The government offers this option for people who have trouble paying their taxes immediately. The agreement requires you to pay your taxes on time, file all future returns, and pay off any outstanding tax balance. Unlike other payment plans, this one requires you to file all of your returns on time and make timely payments. If you are unable to pay at the end of the agreement, the IRS won’t be able to collect the debt.
In addition to a tax payment plan, New Jersey allows installment agreements. The payments in these plans are generally 36 months or less. The DIF doesn’t assess a person’s financial status before approving a payment plan. The amount a person can afford to pay each month must equal the total amount owed in taxes and interest. The payment plan must also cover any penalties and fees that the taxpayer must pay, as well as the interest.
