According to the IRS, taxpayers and their authorized representatives can arrange for an installment tax payment plan by sending in an application. As of 2014, the fee for an installment agreement is $120 for the regular agreement, $52 for a direct debit agreement and $42 for taxpayers who meet certain financial guidelines.Continue Reading
In order to apply for an installment tax payment agreement, individual taxpayers have to owe $50,000 or less for their taxes, penalties and fees, whereas businesses have to owe $25,000 or less, states the IRS. Applicants may still be able to set up an installment payment arrangement even if they owe more than the requirement by completing and mailing in a Form 9465.
After determining their eligibility, taxpayers and business owners need to gather their bank account information, tax return information and employer, personal or business address. The IRS also states that the highest amount that can be paid as well as when it can be paid needs to be included on the application. Once the application has been received, the IRS sends notification of whether or not it was accepted or denied.
It's best to pay taxes in full and on time in order to avoid paying fees and interest on any taxes that are owed.Learn more about Income Tax