Can't Afford Your Taxes? Apply For An Installment Plan

Can’t afford to pay your taxes in full? Sign up for an installment payment plan using form 9465. [PDF]

Simply fill it out and put how much you’re able to pay each month, with a max (usually) of up to 5 years of payment plans.

There is an initial fee of $102, or $52 if you opt for electronic withdrawal. Interest and additional penalties may apply.

The IRS can’t deny your request as long as the amount owed is under $10,000 and you meet certain minimal restrictions Check the form for details.

So if you’re going to have trouble paying your taxes, apply for an installment payment plan. If you’re low on funds, It’s certainly cheaper than paying for your taxes in on your credit card. — BEN POPKEN

Form 9465 [IRS]

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  1. brilliantmistake says:

    I’m no tax expert, but I think if you owe more than $1,000 (or so) in taxes in a year, then you have to start prepaying quarterly or the IRS gets very testy. When I started doing more consulting, where taxes weren’t withheld from my income, I had to start paying quarterly.

  2. Paul D says:

    I was a self-employed tech writer back in 2000 and I owed taxes that year. I had saved a chunk of my earnings specifically to pay my taxes, but apparently it wasn’t enough. I set up an installment plan and paid it off over the following year. My buddy at H&R Block helped me set it up.

    Perfectly above-board and legit. I was even willing to pay it off over 6-8 months, but strangely the IRS’s recommendation was for 12 months.

    As I recall, there was a fee involved, but I don’t even remember how much it was (must not have been much.) I don’t think it was $102 or $52 as described above, but it may have changed in the last few years.

  3. Joe Hass says:

    Ben: Meghann posted on this very topic back in January, and the consensus of the group at the time was this was a Very Bad Idea for three reasons:

    1. The interest accrues and posts daily (versus monthly on a credit card), which means you can think you’ve paid it off, only to discover that there’s still unpaid interest.

    2. Remember that the $102 is on top of all interest and penalties, so it’s possible that you could pay more that way than if you simply put it on plastic.

    3. The penalty for being late on a payment is a possible IRS lien, which mars your credit report for seven years far worse than a late-30 from a credit card (We’re talking a more-than-100-point penalty)

    The bottom line: use Form 9465 as, in the immortal words of another person in dire financial straits once said, “last, last chance: bottom-of-the-barrel, hail-mary, long-shot, wish-you-would-do-it-but-probably-won’t final resort.”

  4. WannaGetMatzoBalled says:

    Or couldn’t you just use a 0% no-fee balance transfer check from a credit card- or even get one specifically for this purpose if you don’t have one– and pay it off immediately, then take the 6-12 months to repay without further fees?