How to Set Up a Payment Plan with the IRS for Your US Small Business Taxes

For US small business owners struggling to pay taxes, setting up an IRS payment plan can help manage tax obligations while avoiding additional penalties. Using tax filing services in the US can simplify the process, ensure eligibility, and keep payments on track.

1. Eligibility and Payment Options

Your business may qualify for an IRS payment plan if:

• It owes $25,000 or less in combined tax, penalties, and interest

• All required tax returns have been filed

Payment options include:

• Full payment: Pay the total balance immediately

• Short-term payment plan: Pay in full within 180 days

• Long-term installment agreement: Spread payments over multiple months

For balances over $10,000, the IRS requires direct debit (automatic bank withdrawals).

2. How to Apply

There are several ways to apply for an IRS payment plan:

• Online: Use the IRS Online Payment Agreement tool with an IRS username or ID.me credentials

• By phone or mail: Submit Form 9465, Installment Agreement Request

Required information:

• Employer Identification Number (EIN)

• Date business was established

• Balance due, tax form, and period

• Business address

• IRS notice details, if applicable

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3. Fees and Payment Methods

• Setup fees: Vary depending on payment method and application mode (online fees are generally lower)

• Payment methods: Direct debit, check, money order, debit/credit card (card payments may incur processing fees)

• Timely payments: Required to avoid default or additional penalties

4. Managing Your Payment Plan

• View and modify your plan using the IRS Online Payment Agreement tool

• Adjustments can include:

  • Monthly payment amount

  • Payment due date

  • Banking information for direct debit

  • Reinstating a defaulted plan

Interest and penalties continue to accrue on unpaid balances until fully paid, so taking action quickly is important.

5. Additional Notes for US Small Businesses

• Filing all required tax returns on time is necessary to qualify for a payment plan

• Fast action is encouraged, as tax debts grow over time

• Using tax filing services can help ensure eligibility, calculate accurate balances, and maintain compliance

Summary

Setting up an IRS payment plan allows US small business owners to manage tax debts responsibly while avoiding additional penalties. By filing required returns, choosing the right payment option, and leveraging tax filing services, small businesses can stay compliant, reduce stress, and pay off taxes efficiently.

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