Have you not been able to pay your taxes on time? Are you trying to find a suitable way to pay off your IRS (Internal Revenue Service) tax debt? If you’ve answered yes, then you can opt for an installment agreement with the IRS. It is one of the suitable tax debt solutions that you can get help of in order to pay back your IRS tax debt.

How installment agreements help in paying off tax debt:

Here are 3 types of installment agreements that you can consider in order to repay your IRS tax debt.

1. Streamlined installment agreement: If you go for streamlined installment agreement, then you won’t have to fill out the Form 433-F that the IRS requires to analyze your financial scenario. However, to pay back your IRS tax debt through streamlined installment agreement, you should not owe more than 25,000 USD and you should also agree to pay off the owed amount within a 60-month time period. In this type of agreement, the IRS accepts an amount that shouldn’t be less than the outstanding balance divided by 50.

2. Guaranteed installment agreement: This installment agreement is one of the suitable tax debt solutions if you owe less than 10,000 USD to the IRS. Along with it, you also have to fulfill other eligibility criteria. For example, you have to agree that you’ll file as well as pay your taxes right on time for the forthcoming tax years. The IRS also doesn’t approve the agreement if you’ve had another installment agreement within the past 5 years. Moreover, your monthly installments should be enough to pay back the owed amount within next 36 months from the time of the agreement.

3. Partial payment installment agreement: Partial payment installment agreement may be your suitable tax debt solution if your financial condition doesn’t permit you to make the minimum payments as per the guaranteed or streamlined installment agreement. In this type of agreement, you have to make monthly payments as per your affordability and the repayment period is relatively more. However, in this type of agreement, the IRS will re-evaluate the terms of agreement after every 2 years in order to check whether you can afford to pay more.

Whatever tax debt solutions you choose, it is quite important to plan a budget and manage your personal finances in a way to save extra funds every month. This will help you in paying off the outstanding debt balance within the specified time period as required by the agreement.