DENVER (KDVR) — The deadline to file your federal tax return is April 18, which is quickly approaching.
If you have a bigger tax bill than you expected or your finances are tight, it can be very overwhelming when it comes time to pay your taxes.
The Internal Revenue Service said, “don’t panic.” “You may qualify for a self-service, online payment plan, including an installment agreement, that allows you to pay off an outstanding balance over time.”
Online payment plans
The IRS said you can apply online for a payment plan.
“Once your online application is complete, you’ll receive immediate notification of whether your payment plan has been approved without having to call or write to the IRS,” the IRS explained.
There are options for short-term and long-term payment plans online.
Short-term payment plans
If you owe less than $100,000 in combined tax, penalties and interest, you can apply for a short-term payment plan, which is for 180 days or less.
The IRS said the short-term payment plan is a $0 setup fee. There will be penalties and interest accrued until your balance is fully paid.
If you are approved for a short-term payment plan, you will be able to pay the amount you owe directly from your check or savings account, or by check, money order or debit/credit card. If you use a card, there are fees.
You can apply here for a payment plan.
Long-term payment plan
If you owe $50,000 or less in combined tax, penalties and interest, and filed all required returns, the IRS said you can apply online for a long-term payment plan.
If you are approved, you can pay the amount you owe through automatic monthly withdrawals from your bank account. Automatic monthly withdrawals are required if you owe $25,000 or more.
There is a $31 setup fee that can be waived for certain individuals. You will also have to pay accrued penalties and interest until your balance is fully paid.
If you choose to pay each month without an automatic debit from your bank account, there is a $130 set up fee.
You can apply here for a payment plan.
Installment agreement
The IRS said that if you don’t qualify for an online payment plan, you may also request an installment agreement.
If you need more time to prepare your federal tax return, you can apply for an extension, which gives you until Oct. 15 to file a return.