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Old 07-01-2015, 05:53 PM
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Prior Years Installment Plan

I am currently paying an installment plan that has 2 consecutive years combined into it. For the earlier year, I owe almost $1,000.00 more than the more recent tax year. My question is, when I go to Direct Pay to make my monthly payment, which tax year should I indicate I am paying for, the earlier year or the more recent year? Or does it even matter? I'm curious, because clearly the older debt has the potential to cost me more in interest and failure to pay penalties.



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Old 07-03-2015, 09:01 AM
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My question is, when I go to Direct Pay to make my monthly payment, which tax year should I indicate I am paying for, the earlier year or the more recent year?=========>>>>> I guess as you are currently paying an installment plan that has 2 consecutive years combined into it, you indicate that you are paying the more recent year;you may choose your monthly payment amount. You must pay at least this amount each and every month. You can always pay more, but you should write down the minimum you are willing to pay each month.

Or does it even matter? I'm curious, because clearly the older debt has the potential to cost me more in interest and failure to pay penalties.==========>>>>>>>>>> Through a bill consolidation plan, the company will work with you to consolidate all debt into one payment every month. It is important to know exactly what your installment payment will be for a specific amount of money borrowed or "financed" so that there are no surprises when you receive your monthly bill or when the payment is automatically deducted from your bank account. you need to contact the debt relief company/lender.



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Old 07-03-2015, 03:34 PM
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I neglected to say the installment plan is with the IRS. I know what my monthly payment is and when it is due. My question is when I go to the IRS Direct Pay website, it asks for the tax year. I've been choosing the most recent tax year, but it occurred to me recently that I owe more on the earlier tax year and clearly the interest will grow on it faster. So I am curious if I choose the earlier tax year will it be applied to that year specifically? Even though the two years are combined in the installment plan?



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Old 07-03-2015, 04:25 PM
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Originally Posted by RicBear7 View Post
My question is when I go to the IRS Direct Pay website, it asks for the tax year. I've been choosing the most recent tax year, but it occurred to me recently that I owe more on the earlier tax year and clearly the interest will grow on it faster. So I am curious if I choose the earlier tax year will it be applied to that year specifically? Even though the two years are combined in the installment plan?
If you owe less than $25K, under this plan you can decide how much your monthly payment will be. However, you must pay off your balance within five years. with an installment agreement, interest and penalties will continue to be accrued. One of the ways you can resolve your IRS tax liability is through an installment agreement (monthly payment plan). When you set up your installment agreement, the IRS requires that you include all of the tax years that you owe for in the installment agreement. So, for example, say, if you owe taxes, penalties and interest for 2005, 2006 and 2007, you must include all 3 years in the installment agreement. You could not set up an agreement for just 2006.So, what happens if you have set up an installment agreement and you find yourself owing more tax this year than you can afford to pay back. I guess then, you will be re-negotiating your installment agreement. When you’re in this situation, you should immediately call the IRS and let them know you owe for the current year and you need to include that on your tax return. Depending on the total amount you owe and how long ago you negotiated your payment plan, you may have to go through the whole process of sending in a financial statement and negotiating with the IRS for your payment plan, or, they may simply add that additional tax to your plan.I guess you need to contact the irs for more accurate info on your issue,



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