About IRS Installment Agreements
By Erik Neilson
, last updated August 29, 2011
If you’ve ever had to pay back taxes to the IRS, chances are you know how difficult of a situation doing so can be. One way of dealing with large tax debt is to enter into an installment agreement with the IRS. Many people jump into installment agreements without taking the time to understand them, however, which can result in a variety of problems. The more you can learn about IRS installment agreements, the better prepared you’ll be to take them on if you are considered to be a candidate.
Installments Allow You to Pay Over Time
Sometimes paying your taxes right off the bat can be quite difficult. If this is true for you, installments may be very helpful. Paying off your taxes in installments allows you to pay small amounts of money at a time, which some people find essential in order to pay off their tax debt. If you owe more than $1,000 in taxes, seeking an installment agreement may be a good idea.
Installments Aren’t Free
Setting up an installment agreement is not without it’s own costs, which many people don’t realize. Indeed, installment agreements often cost money to set up, and interest can sometimes be a part of the monthly fee. If you don’t mind paying the extra money in order to save more in the short-term, however, setting up an installment agreement is not a bad idea, especially if you’d be unable to pay the entire amount up front.
Tax Professionals Can Help
Taking on an installment agreement on your own can be a frightening situation, especially if you owe quite a bit of money. As a result, you should always strive to work with a tax professional if possible. Working with a tax professional may cost you a bit of money, but the amount of stress you’re likely to avoid is more than worth the money.