Taxes for 2022 were due in April of 2023 but you didn’t have the cash to pay then and you don’t have the cash to pay now. What to do? Hiding under your blankets and ignoring the IRS notices is definitely NOT the solution. The IRS does not like to be ignored.
According to IRS data, 3 million taxpayers set up payment plans over the last two years.
Most taxpayers qualify for an IRS payment plan (or installment agreement) and can use the Online Payment Agreement (OPA) to set it up to pay off an outstanding balance over time. Once taxpayers complete the online application, they receive immediate notification of whether the IRS has approved their payment plan. The process only takes a few minutes, and there’s no paperwork and no need to call, write or visit the IRS. Literally minutes! And then there is no more hiding and carrying the stress of letters from the IRS arriving in your mailbox.
If you owe less than $50,000, make monthly payments for up to 72 months. Taxpayers are encouraged to set up plan payments using direct debit (automatic bank withdraw), which eliminates the need to send a payment each month, saves postage costs, and reduces the chance of default. The IRS requires direct debit for balances between $25,000 and $50,000.
Give the online system a go and if you run into trouble or cannot make the payments as prescribed, please reach out to me and let’s see what we can do to help you. There is always a solution, we just need to find the best one for each situation.
For 2023 and beyond, lets look at how we can avoid this from happening again. Getting ahead of your tax liability will make all the difference.