The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Hugh H on March 02, 2014, 07:14:32 PM

Title: Large Tax Payment due, can I pay using an installment plan?
Post by: Hugh H on March 02, 2014, 07:14:32 PM

So after realizing a bit of stock market gains, I figure I owe the IRS around 25k. If I were to pay this debt right off the bat, I would have to close some market positions that are also in the green, leading to more taxes down the line. Also, these positions are making me money and I don't want to close them.

Does anyone know what it takes to be approved for an installment payment plan? Is it interest free? That would be so ideal for me. Wondering also if anyone has any experience doing this in the past...

Title: Re: Large Tax Payment due, can I pay using an installment plan?
Post by: SwordGuy on March 02, 2014, 08:34:13 PM

If you have a good tax payment history, the IRS (in my experience) has been pretty reasonable.  You might pay some interest but they might waive the penalties.

Title: Re: Large Tax Payment due, can I pay using an installment plan?
Post by: MDM on March 02, 2014, 10:56:17 PM

You will likely find this link worth reading: http://www.irs.gov/uac/Three-Ways-to-Pay-Your-Federal-Income-Tax (http://www.irs.gov/uac/Three-Ways-to-Pay-Your-Federal-Income-Tax)

Title: Re: Large Tax Payment due, can I pay using an installment plan?
Post by: MustachianAccountant on March 03, 2014, 09:27:47 AM

Another option is a home equity loan to pay the bill. You'd have to figure out which interest rate is better - the bank's or the IRS's.