If you owe the IRS and can't pay in full, an installment agreement (payment plan) lets you pay your tax debt over time in monthly payments. Here's what you need to know.
Short-Term Payment Plan
For debt under $100,000, you may qualify for a short-term plan of up to 180 days. There's no setup fee if you pay online. You'll still owe interest and some penalties, but the IRS won't pursue more aggressive collection while you're on the plan.
Long-Term Installment Agreement
For larger balances, a long-term plan can extend your payments over 72 months or more. Setup fees apply in some cases. The IRS will calculate a monthly payment based on what you can afford, using national standards for allowable expenses.
What You'll Need
You'll typically need to be current on filing, provide financial information, and agree to stay current on future taxes. If you're self-employed or have complex finances, the process can be more involved.
Benefits of a Payment Plan
Once you're on an approved plan, the IRS generally won't levy your wages or bank accounts for that debt. It can provide breathing room and a clear path to resolving your tax obligation.