How to Pay Off Your Installment Agreement Faster
If you want to pay off your installment agreement faster, you have a few different options. The flexibility offered by IRS payment plans allows you to pay more if you are able to, which allows you to cut down your balance and minimize penalties and interest.
You can begin your payment plan by making a lump-sum payment. If you have a method of getting some extra cash, such as getting a loan or selling some assets, this one-time payment can offer you several benefits:
- Lowering your balance reduces the amount of interest and penalties you’ll have to pay
- A lump-sum payment can allow you to lower your monthly payment or reduce your repayment period
- A one-time payment may allow you to qualify for certain types of installment plans, such as streamlined installment agreements
If you can’t make a lump-sum payment, you still have other options for paying off your installment agreement faster.
Get Tax Relief
You may be able to get tax relief with any of the following methods:
- Any type of penalty abatement
- Innocent spouse relief
- Expiration of the statute of limitations for collection
- Disputing the amount of an IRS adjustment to your return
Make sure you ask your tax attorney whether you could qualify for any of these types of tax debt relief.
Pay More Than the Minimum
Your installment agreement will require that you pay at least the minimum monthly payment, but there’s nothing stopping you from paying more than this amount. You may pay a little extra each month or increase your payment irregularly when you have some extra cash on hand.
Remember—penalties and interest keep accruing while you make installment payments. The faster you pay, the less you’ll end up paying in late-payment penalties and interest.
Also be aware that you need to keep up with your current tax obligations while you’re paying off your tax debt. A failure to file your tax returns or make current tax payments could jeopardize your installment agreement.
Consult with a tax relief attorney if you need assistance negotiating an installment agreement or coming up with other tax resolution strategies.
Get free tax advice from a Michigan tax lawyer by calling Ayar Law at 248-262-3400 today.