You went to great lengths to score an IRS payment plan. While it’s only natural to experience a rush of relief, it’s dangerous to get too comfortable. Mess this up and you could face a series of truly harsh consequences. It’s time to get your finances in order — here’s how to get started:
Set Up Automatic Payments
The IRS incentivizes installment plans featuring automatic payments, so it’s best to avoid credit card payments if you need a long-term plan. The Direct Debit Installment Agreement (DDIA) costs just $31 to set up if completed online, versus $149 for online applications for accounts not paid through direct deposit. Not only could you save considerably on application and startup fees, but direct deposit can also keep you on track by preventing missed or late payments. Of course, if you opt for direct deposit, you’ll want to keep enough money in your account to cover your monthly payment — the last thing you need is a pricey fee for overdrawing your bank account.
If Paying By Card Or Check, Set Several Reminders
Direct deposit is not always a viable option. While credit card and money order payments will cost you more upfront, they may be all you can handle at this time. Keeping up with payments can be tough if they aren’t automatically taken from your account; set reminders on your smartphone to ensure you pay on time.
Take Advantage of the Online Payment Agreement Tool
The IRS makes it easy to keep up to date with your payment plan. The online payment agreement tool allows you to review your plan and make select changes. Keep in mind, however, that the tool will not accept any revisions that do not meet the required minimum payment threshold.
Quality counsel early on can significantly reduce your risk of making costly IRS payment plan mistakes. Look to Highland Tax Resolution for assistance every step of the way.