If you owe federal tax but can’t pay the entire amount at once, the IRS has a few options that will help you settle your tax bill. You should carefully consider your repayment options before you make a final decision.
One of the most popular ways to resolve tax debt is by setting up an installment agreement with the IRS. This type of agreement will allow you to pay off what you owe in monthly installments. The IRS has short-term installment options, which you can opt for if you can pay off your balance within 120 days, and long-term installment options, which allow you to pay over an extended period of time. Keep in mind that if you opt for a long-term agreement, you will end up paying more interest over time.
Offers in Compromise
In addition to offering installment agreements, the IRS offers another way to pay called an offer in compromise. This will allow you to settle your tax liabilities for a lower amount than what you actually owe. While this can be a great option to help lower your tax liability, the IRS only agrees to it under certain conditions. If you are interested in pursuing this as an option, talking to a tax specialist is key.
If you’re not sure which option is best for you, get in touch with the tax relief pros at Price Advantage Accounting We can help solve all your tax problems!