IRS Installment Agreement
Pay your tax debt over time with a monthly payment plan that fits your budget.
Check If You QualifyWhat Is an Installment Agreement?
An IRS installment agreement is a payment plan that allows you to pay your tax debt over time rather than in one lump sum. It's one of the most common ways taxpayers resolve their tax obligations when they can't afford to pay in full.
Once you're in an installment agreement, the IRS generally won't pursue aggressive collection actions like wage garnishments or bank levies as long as you stay current with your payments.
There are several types of installment agreements, each with different requirements and benefits. The right option depends on how much you owe, your ability to pay, and how quickly you can resolve the debt.
Types of Installment Agreements
Guaranteed Installment
If you owe $10,000 or less and can pay within 3 years, the IRS must approve your request.
Streamlined Installment
For debts up to $50,000, get approved without detailed financial disclosure if you can pay within 6 years.
Partial Payment Installment
Pay what you can afford each month, even if it won't cover the full balance before the statute expires.
Non-Streamlined
For larger debts or longer terms, requires full financial disclosure but offers more flexibility.
Benefits of an Installment Agreement
Why a payment plan may be right for you:
Key Advantages:
- Stop aggressive collection actions
- Avoid wage garnishment and bank levies
- Predictable monthly payments you can budget for
- Continue your normal financial life
- Reduce penalties (in some cases)
- Possible lien withdrawal with Direct Debit
Requirements:
- All tax returns must be filed
- Current year taxes must be paid (or withheld properly)
- Ability to make monthly payments
- Setup fee ($31-$225 depending on type)
- Interest and some penalties continue to accrue
- Must stay compliant going forward
Frequently Asked Questions
How much will my monthly payment be?
For streamlined agreements, you divide your balance by 72 months to get the minimum payment. For non-streamlined plans, the IRS calculates your payment based on your disposable income using Collection Financial Standards.
What happens if I miss a payment?
Missing payments can result in defaulting on your agreement, which reinstates collection actions and may trigger levies. If you're struggling, contact the IRS before you miss a payment to discuss options like modifying your agreement.
Can I pay off my agreement early?
Yes, you can pay off your installment agreement at any time without penalty. Paying early saves you money on interest that would otherwise continue to accrue.
Will I still owe penalties and interest?
Yes, penalties and interest continue to accrue on your unpaid balance during an installment agreement. However, the failure-to-pay penalty is reduced to 0.25% per month (instead of 0.5%) while you're in the agreement.
Can I set up an installment agreement online?
If you owe $50,000 or less and can pay within 72 months, you can apply online through the IRS website. For larger amounts or longer terms, you'll need to work with the IRS directly or through a representative.
Payment Plans for Your Situation
Different professions and circumstances face unique tax challenges. Find guidance specific to you.
Self-Employed
Freelancers and independent workers
Small Business Owners
Business owners with tax debt
1099 Contractors
Independent contractors
Gig Workers
Uber, DoorDash, Instacart drivers
Real Estate Agents
Agents and brokers
Restaurant Owners
Food service businesses
Construction Contractors
Builders and tradespeople
Truck Drivers
Owner-operators
Healthcare Workers
Nurses, doctors, travel staff
Divorced Individuals
Post-divorce tax issues
Veterans
Military veterans
Commission Sales
Sales professionals
Not sure if a payment plan is right? Compare IA vs Currently Not Collectible
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