What is the Minimum Monthly Payment for an IRS Installment Plan?
If you can't pay your taxes in full by the deadline, you may be able to set up an IRS payment plan to make monthly payments. Minimum monthly payments are based on your total tax debt, and you can use an IRS payment plan calculator to calculate your payments. Here's what you need to know if you can't pay your taxes in full and on time.
Key Takeaways
- Your minimum monthly payment for an IRS installment plan is generally what you owe divided by 72, if you don't specify a different amount.
- You can start an IRS installment plan by applying online, over the phone, or by mailing Form 9465 to the IRS.
- If you owe less than $10,000, your installment plan will usually be automatically approved as a "guaranteed" installment agreement if you meet certain conditions.
- For balances between $10,000 and $50,000, you can usually qualify for a "streamlined" installment plan, which typically doesn't require additional financial information.
IRS payment plan
If you can’t afford to pay your taxes, you may be able to qualify for an installment plan with the Internal Revenue Service (IRS).
- An installment plan allows you to pay your taxes over time while avoiding garnishments, levies or other collection actions.
- You'll still owe penalties and interest for paying your taxes late, but it can help make the payments more affordable.
- The minimum monthly payment for your plan depends on how much you owe.
Minimum monthly payment
You can apply for an installment agreement online, over the phone, or through the mail by sending Form 9465 to the IRS.
- To some degree, you get to choose how much you want to pay every month.
- The IRS will ask you what you can afford to pay per month, encouraging you to pay as much as possible to reduce your interest and penalties.
- If you choose not to answer or let the IRS pick a payment amount for you, your minimum payment will typically be set to the amount you owe divided by 72.
Fees for IRS installment plans
If you can pay off your balance within 180 days, it won't cost you anything to set up an installment plan.
If you can't pay off your balance within 180 days, setting up a direct debit payment plan online will cost $22, or $107 if the plan is set up by phone or mail.
If you're not using direct debit, then setting up the plan online will cost $69, or $178 if the plan is set up by phone or mail.
If you're a lower-income taxpayer, you may be able to reduce these fees.
TurboTax Tip:
Setting up a direct debit payment plan online is less expensive than setting it up by phone or mail.
Balance of $10,000 or below
If you owe less than $10,000 to the IRS and are financially unable to pay the full amount when it's due, your installment plan will generally be automatically approved as a "guaranteed" installment agreement. Under this type of plan, you must agree to pay off your balance within three years.
However, during the past five tax years, you (and your spouse if filing a joint return) must have timely filed all your tax returns and paid any income tax due. You also can't have other existing installment agreement with the IRS.
Balance between $10,000 and $50,000
With a balance due above $10,000, you can qualify for a "streamlined" installment plan. With a streamlined plan, you generally have 6 years (72 months) to pay. If you owe $25,000 to $50,000, you must agree to pay by direct debit or payroll deduction.
While acceptance isn't guaranteed, the IRS doesn't usually require additional financial information to approve these plans. However, if you can't pay an amount equal to what you owe divided by 72, you will need to complete Form 433-F unless you qualify for an exception.
Balance over $50,000
Qualifying for a plan with a higher balance due requires additional information. For instance, you must use Form 9465 to apply (i.e., you can't apply online or by phone). You also must file Form 433-A, where you'll have to provide detailed information on your investments, assets, income, employment, bank accounts, and more.
With TurboTax Live Full Service, a local expert matched to your unique situation will do your taxes for you start to finish. Or, get unlimited help and advice from tax experts while you do your taxes with TurboTax Live Assisted.
And if you want to file your own taxes, TurboTax will guide you step by step so you can feel confident they'll be done right. No matter which way you file, we guarantee 100% accuracy and your maximum refund.
Get started now by logging into TurboTax and file with confidence.
