Irs Installment Agreement Interest Rate 2019

If you owe money to the Internal Revenue Service (IRS) but are unable to pay the full amount upfront, an installment agreement may be an option for you. An installment agreement is a payment plan that allows you to pay off your tax debt over time, rather than in a single lump sum.

However, it`s important to note that the IRS charges interest on any unpaid tax debt, even if you`re on an installment agreement. The interest rate for 2019 is 6%. This interest rate is set by the IRS and is subject to change annually.

While it may seem daunting to have to pay interest on top of your tax debt, it`s important to remember that an installment agreement can still be a good option for those who can`t pay the full amount upfront. By spreading out your payments over time, you may be able to avoid penalties and further financial hardship.

If you`re considering an installment agreement, there are a few things to keep in mind. First, you`ll need to file all of your tax returns before the IRS will consider your request for an installment agreement. Additionally, you`ll need to be able to show that you`re unable to pay the full amount of your tax debt at once.

To apply for an installment agreement, you`ll need to fill out IRS Form 9465, which is the Installment Agreement Request form. You`ll also need to provide information about your income and expenses in order to determine what monthly payment amount you can afford.

Keep in mind that there are fees associated with setting up an installment agreement. If you`re able to pay off your debt within 120 days, you may be able to avoid these fees by setting up a short-term payment plan.

Overall, if you`re unable to pay your tax debt in full, an installment agreement may be a good option for you. Just be sure to consider the interest rate and any associated fees before making a decision. And as always, if you`re unsure about what to do, it`s best to consult with a tax professional who can help guide you through the process.