If you owe on your taxes and are unable to pay before the deadline on April 15th, here are a few options to help you out.
- Installment Agreement
- You can apply for an online installment agreement on the IRS website. You must be current with your tax filings, meaning you have to have filed all your tax returns in the past and the return due this year, and you will need to owe $50,000 or less in combined individual income tax, penalties, and interest.
- If you do not qualify for an online installment agreement, you can still complete and mail Form 9465, Installment Agreement Request and Form 433-F, Collection Information Statement. Or call 1-800-829-1040, or the number on your bill or notice.
- This is not a free offer. The IRS will apply a $120 fee, but only a $52 fee if you consent to direct debit. If you qualify for a reduced fee, it is $43. The IRS will continue to charge interest on your overdue taxes and may file a federal tax lien until you pay in full. The IRS will also seize any refund due to you while you are repaying them.
- Offer in Compromise (OIC)
- An OIC allows you to settle your tax debt for less than the amount that you owe. The IRS will take into consideration your circumstances, such as your income, expenses, asset equity, and ability to pay. Up to 80% of requests are rejected. There is a non-refundable $186 fee to apply and you will have to give them a lump sum one monthly payment or 20% of your income taxes due up front. The IRS has a Pre-Qualifier Online Tool available to help you determine if your qualify.
- Ask for More Time
- Depending on your circumstances, you may be granted a brief amount of additional time to pay your taxes. You can make the request through the above Online Payment Agreement or by calling 1-800-829-1040.
- Make a Partial Payment
- Something is better than nothing, and that will be less penalties and interest for you in the future. As when making a payment in full, make it out to the United States Treasury and on your check or money order you should have your name, address, daytime phone number, Social Security number, the tax form number (i.e., 1040EZ, 1040A, 1040, 1040NR), and the tax year. Send it to the appropriate address and then immediate follow up with one of the above options in order to resolve your outstanding debt.
- Can you not pay at all?
- If you are insolvent or have circumstances beyond your control such as unemployment or disability, the IRS will listen. Call them at 1-800-829-1040 and plead your case.
The state goverment of Alabama does not officially work out payment plans. But from their website (Revenue.Alabama.gov), this is what they offer:
- By Mail
- Send payments to the appropriate addresses found on Revenue.Alabama.gov/incometax/mailingaddress.cfm
- No fee will be charged if you e-pay your debt at MyAlabamaTaxes.Alabama.gov
- Credit Card Payments
- A convienence fee will be charged.
- Official Payments Corporation (www.officialpayments.com) accepts Visa, American Express, Discover, and MasterCard.
- Value Payment Systems (www.payaltax.com) accepts Bill Me Later, Visa, Discover, and MasterCard.