If you owe taxes to the IRS and are unable to pay the entire amount at once, an installment agreement may be an option for you. An installment agreement allows you to pay your tax debt over time, rather than all at once.
But what if you owe taxes from multiple years? Can you still enter into an installment agreement? The answer is yes.
An installment agreement for multiple years allows you to consolidate your tax debts from multiple tax years into one monthly payment. This can make it easier for you to manage your payments and ensure that you stay on track with your tax obligations.
To be eligible for an installment agreement for multiple years, you must meet certain requirements. For example, you must have filed all tax returns related to the tax debts you wish to consolidate. Additionally, you must be current on all of your tax obligations for the current tax year.
When you enter into an installment agreement for multiple years, you will likely be required to make a minimum monthly payment, which will be used to pay off the total amount owed. The amount of your monthly payment will depend on a variety of factors, including the total amount owed, your income, and your other financial obligations.
It is important to note that interest and penalties will continue to accrue on your tax debt until it is paid in full. This means that the longer it takes you to pay off your debt, the more you will owe in interest and penalties.
If you are considering an installment agreement for multiple years, it is important to consult with a tax professional. They can help you determine if an installment agreement is the right option for you, and assist you with the application process.
In conclusion, if you owe taxes from multiple years, an installment agreement may be an option for you. By consolidating your tax debts into one monthly payment, you can more easily manage your payments and stay on track with your tax obligations. However, it is important to work with a tax professional to ensure that you are eligible for an installment agreement and to determine the best course of action for your specific situation.