If you`re struggling to pay your taxes, you may be wondering if a guaranteed installment agreement is right for you. A guaranteed installment agreement is a tax payment plan that allows you to pay your back taxes over time.
The IRS offers these payment plans to taxpayers who owe less than $10,000 and meet certain eligibility requirements. If you qualify, you can set up a payment plan for up to 72 months.
But before you sign up for a guaranteed installment agreement, there are a few things you should consider.
First, be aware that interest and penalties will continue to accrue on your unpaid taxes while you`re making payments. This means that your overall tax debt will likely grow while you`re paying it back.
Second, you`ll need to make sure you can afford the monthly payments. If you miss a payment, the IRS can cancel your installment agreement and start collection proceedings against you.
Third, you may still be subject to collection actions like wage garnishment or a bank levy while you`re on an installment agreement. So if you`re hoping to avoid collection actions altogether, a guaranteed installment agreement may not be the best option for you.
Overall, a guaranteed installment agreement can be a helpful tool for taxpayers who are struggling to pay their taxes. But it`s important to understand the potential drawbacks and make sure you`re prepared to meet the terms of the agreement before signing up. If you have questions or concerns, consider speaking with a tax professional or a representative from the IRS.
