IRS Identity Protection PINs, or IP PINs, are a vital tool to protect taxpayers from identity thieves. The IRS encourages taxpayers to get an IP PIN and establish their IRS Online Account. These tools help guard against fraudsters trying to steal personal and financial information.
Important things to know about an IP PIN
• It’s a six-digit number known only to the taxpayer and the IRS.
• The program is voluntary, though it’s strongly encouraged.
• In cases of proven identity theft, taxpayers will be assigned an IP PIN.
• The IP PIN should be entered on the electronic tax return when prompted by the software product or on a paper return next to the signature line.
• Only taxpayers who can verify their identity can get an IP PIN.
• Tax professionals cannot get an IP PIN on behalf of their clients.
• Each IP PIN is valid for one year. When it expires, a new one is generated for security reasons.
• Some participants will receive their IP PIN in the mail. Others will have to log in to the Get an IP PIN tool to get their IP PIN.
• Taxpayers already enrolled in the program can log in to the Get an IP PIN tool to see their current IP PIN.
• Taxpayers with an IP PIN must use it when filing any federal tax returns during the year, including prior year tax returns or amended returns.
• IP PIN users should share their number only with the IRS and their tax preparation provider.
• The IRS will never call, email or text the taxpayer to request their IP PIN.
How to request an IP PIN
After a taxpayer verifies their identity, the Get an IP PIN tool lets people with a Social Security number or individual taxpayer identification number to request an IP PIN online. Taxpayers should review the identity verification requirements before they use the Get An IP PIN tool.
Tax professionals should advise clients affected by identity theft to request an IP PIN. Even if a thief has already filed a fraudulent tax return, an IP PIN could prevent the taxpayer from being a repeat victim of tax-related identity theft.
Taxpayers who can’t validate their identity online can still get an IP PIN
Taxpayers who can’t validate their identity online and whose income is below a certain threshold can file Form 15227 (EN-SP), Application for an Identity Protection Personal Identification Number. The 2024 threshold is $79,000 for individuals or $158,000 for married couples filing joint returns.
Taxpayers who can’t validate their identity online or by phone, those who are ineligible to file a Form 15227 or those who are having or technical difficulties can make an appointment at a Taxpayer Assistance Center.
Most U.S. citizens and permanent residents who work in the United States need to file a tax return if they make more than a certain amount for the year.
The IRS has a variety of information available on IRS.gov to help taxpayers, including a special “free help” page. Here are some specific details to help people if they need to file a tax return.
Factors that affect whether someone needs to file a tax return
Here are some of the things that affect whether someone must file a tax return.
Gross income. Gross income means all income a person received in the form of money, goods, property and services that aren’t exempt from tax. This includes any income from sources outside the United States or from the sale of a main home, even if you can exclude part or all of it.
Required filing threshold. People need to see if their gross income is over the required filing threshold. Filing statuses have different income thresholds, so individuals may need to consider their potential filing status as well.
There are five filing statuses:
• Single
• Head of household
• Married filing jointly
• Married filing separate
• Qualifying surviving spouse
Find details on tax filing requirements with Publication 501, Dependents, Standard Deduction, and Filing Information.
Tax year 2023 filing thresholds by filing status
Self-employment status. Self-employed individuals must file an annual return and pay estimated tax quarterly if they had net earnings from self-employment of $400 or more.
Status as a dependent. A person claimed as a dependent may still have to file a return. It depends on their gross income, including:
• Earned income. This includes salaries, wages, tips, professional fees and other amounts received as pay for work performed.
• Unearned income. This is investment-type income and includes interest, dividends and capital gains, rents, royalties, etc. Distributions of interest, dividends, capital gains and other unearned income from a trust are also unearned income to a beneficiary of the trust.
A parent or guardian must file a tax return for dependents who need to file but aren’t able to file for themselves.
Potential benefits when people file a tax return
Get money back. In some cases, people may get money back when they file a tax return. For example, if their employer withheld taxes from their paycheck, the person may be due a refund.
Avoid interest and penalties. People can avoid interest and penalties by filing an accurate tax return on time and paying any tax they owe before the deadline. They should file on time or request an extension to avoid some penalties. If they owe a tax debt and can’t pay all or part of it, the IRS can help.
Build Social Security benefits. Reporting income on a tax return is important for self-employed people because this information is used to calculate their Social Security benefit. Unreported income can lead to an incorrect calculation.
Get an accurate picture of income. When people report all their income, they give lenders an accurate financial picture to determine the loan amounts and rates they may receive.
Get peace of mind. When people file an accurate tax return and pay their taxes on time, they know that they’re doing the right thing to follow the law.
Some people should consider filing even if they aren’t required
People may want to file even if they make less than the filing threshold because they may get money back. This could apply to them if they:
• Have had federal income tax withheld from their pay
• Made estimated tax payments
• Qualify to claim tax credits such as:
o Earned Income Tax Credit
o Child Tax Credit
o American Opportunity Tax Credit
o Credit for Federal Tax on Fuels
o Premium Tax Credit
o Health Coverage Tax Credit
o Credits for Sick and Family Leave
o Child and Dependent Care Credit
The Interactive Tax Assistant can help people determine if they need to file
The Interactive Tax Assistant is an online tool that provides answers to common tax law questions based on an individual’s specific circumstances. Based on a user’s input, it can determine if they should file a tax return. It can also help them understand:
• Their filing status
• If they can claim a dependent
• If the type of income they have is taxable
• If they’re eligible to claim a credit
• If they can deduct expenses
The information is anonymous and only used to help answer the person’s question. The tool will not share, store or use information in any other way, and it can’t identify the individual using it. The system discards the information the user provides when they exit a topic.
WASHINGTON —The Internal Revenue Service today offered a checklist to help taxpayers as they prepare to file their 2023 tax returns during filing season.
These six easy tips will help make tax preparation smoother in 2024. Much of this information is also available on a special IRS.gov free help page:
1. Gather all necessary tax paperwork and records for accuracy to avoid missing a deduction or credit. Taxpayers should have all their important and necessary documents before preparing their return. This will help file a complete and accurate tax return. Errors and omissions slow down tax processing, including refund times.
Before beginning, taxpayers should have:
• Social Security numbers for everyone listed on the tax return.
• Bank account and routing numbers.
• Various tax forms such as W-2s, 1099s, 1098s and other income documents or records of digital asset transactions.
• Form 1095-A, Health Insurance Marketplace statement.
• Any IRS letters citing an amount received for a certain tax deduction or credit.
2. Remember to report all types of income on the tax return. This is important to avoid receiving a notice or a bill from the IRS. Don’t forget to include income from:
• Goods created and sold on online platforms.
• Investment income.
• Part-time or seasonal work.
• Self-employment or other business activities.
• Services provided through mobile apps.
3. Filing electronically with direct deposit is the fastest way to receive a refund. Avoid paper returns. Tax software helps individuals avoid mistakes by doing the math. It guides people through each section of their tax return using a question-and-answer format.
For those waiting on their 2022 tax return to be processed, here’s a special tip to ensure their 2023 tax return is accepted by the IRS for processing. Make sure to enter $0 (zero dollars) for last year’s adjusted gross income (AGI) on the 2023 tax return. Everyone else should enter their prior year’s AGI from last year’s return.
4. Free resources are available to help eligible taxpayers file online. Free help may also be available to qualified taxpayers. IRS Free File provides a free online alternative to filing a paper tax return. IRS Free File is available to any individual or family who earned $79,000 or less in 2023.
With IRS Free File, leading tax software providers make their online products available for free as part of a 21-year partnership with the IRS. This year, there are eight products in English and one in Spanish. Taxpayers must access these products through the IRS website.
People who make over $79,000 can use the IRS’ Free File Fillable Forms. These are the electronic version of IRS paper forms. This product is best for people who are comfortable preparing their own taxes.
Qualified taxpayers can also find free one-on-one tax preparation help around the nation through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.
5. Consider which filing option to use; each one has its own benefits. Taxpayers should decide based on their personal situation and comfort level with tax preparation.
• Personally file taxes.
• Use online filing services.
• Hire a tax professional. Choose a tax professional carefully. Most tax return preparers are professional, honest and provide excellent service to their clients. However, dishonest tax return preparers who file false income tax returns do exist. The IRS has a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications and more on choosing a tax pro on IRS.gov.
6. Don’t wait on hold when calling the IRS. Use online resources at IRS.gov to get answers to tax questions, check a refund status or pay taxes. There’s no wait time or appointment needed — online tools and resources are available 24 hours a day. The IRS’ Interactive Tax Assistant tool and Let Us Help You resources are especially helpful.
Tax credits and deductions change the amount of a person’s tax bill or refund. People should understand which credits and deductions they can claim and the records they need to show their eligibility.
Tax credits
A tax credit reduces the income tax bill dollar-for-dollar that a taxpayer owes based on their tax return.
Some tax credits, such as the Earned Income Tax Credit, are refundable. If a person’s tax bill is less than the amount of a refundable credit, they can get the difference back in their refund.
To claim a tax credit, people should:
• Keep records to show their eligibility for the tax credits they claim.
• Check now to see if they qualify to claim any credits next year on their tax return.
Deductions
Deductions can reduce the amount of a taxpayer’s income before they calculate the tax they owe.
Most people take the standard deduction. The standard deduction changes each year for inflation. The amount of the standard deduction depends on a taxpayer’s filing status, age and whether they’re blind and whether the taxpayer is claimed as a dependent by someone else.
Some people must itemize their deductions, and some people may choose to do so because it reduces their taxable income more than the standard deduction. Generally, if a taxpayer’s itemized deductions are larger than their standard deduction, it makes sense for them to itemize.
Interactive Tax Assistant
Find help with tax questions based on specific circumstances with the Interactive Tax Assistant. It can help a person decide if they’re eligible for many popular tax credits and deductions.
More information:
• Tax credits for individuals: What they mean and how they can help refunds
• Deductions for individuals: What they mean and the difference between standard and itemized deductions
Whether someone is entering the workforce for the first time or changing jobs, filling out new hire paperwork can feel overwhelming. One of the forms employees must complete is a W-4, Employee’s Withholding Certificate. This form tells employers how much money to withhold from the employee’s pay for federal income tax.
It’s important for employees to know the correct amount of tax to withhold so they don’t owe too much money when filing their tax return or have too much money withheld from their paychecks.
Get tax withholding right.
Federal income tax is a pay-as-you-go tax. Taxpayers pay the tax through their employers as they earn or receive income during the year. Employers take out – or withhold – income tax from employee paychecks and pay it to the IRS in the taxpayer’s name.
If an employee doesn’t have enough tax withheld, they may face an unexpected tax bill and a possible penalty when they file a tax return next year. If they overpay or have too much tax withheld during the year, the employee will likely get a tax refund when they file their tax return. Adjusting the tax withheld up front may mean a bigger paycheck throughout the year.
Form W-4, Employee’s Withholding Certificate
New employees must complete Form W-4 so that their employer can withhold the correct amount of federal income tax from their pay. Employees should read the instructions carefully. The employer will base the amount of withholding on the information the employee provides on their W-4 and how much the employee earns.
People can also submit a new W-4 when their personal or financial situation changes and they want to update their withholding.
Taxpayers can use the Tax Withholding Estimator
If a taxpayer isn’t sure how much tax they should have withheld, they can use the Tax Withholding Estimator tool on IRS.gov to:
• Estimate their federal income tax withholding.
• See how their refund, take-home pay or tax due is affected by their withholding amount.
Not all workers are employees
Workers are classified as either contractors or employees according to certain rules. Workers who are independent contractors need to pay their taxes directly to the IRS. Depending on how much they earn, they may need to pay estimated tax on a quarterly basis.
Keep tax forms in a safe place.
Form W-2, Wage and Tax Statement, is a taxpayer’s record of the income they received throughout the year and the amount of money withheld for federal, state, local and other taxes. Employers typically send these out in late January each year. Taxpayers should keep all the tax documents they receive and store them in a safe place so they are available for filing an accurate tax return.
The IRS offers several different payment plan options, but taxpayers may want to first consider non-IRS options depending on their financial situation. Regardless of how someone pays, they should act quickly because tax bills get larger as long as they remain unpaid.
Online self-service payment plans
Most taxpayers qualify for an IRS payment plan (or installment agreement) and can use the Online Payment Agreement (OPA) to set it up to pay off an outstanding balance over time. Once taxpayers complete the online application, they receive immediate notification of whether the IRS has approved their payment plan.
The process only takes a few minutes, and there’s no paperwork and no need to call, write or visit the IRS. Setup fees may apply for some types of plans. Taxpayers who don’t qualify for online self-service should contact the IRS for other payment plan options using the phone number or address on their most recent notice.
• Individual taxpayers’ online payment plan options include:
o Short-term payment plans – For taxpayers who have a total balance less than $100,000 in combined tax, penalties and interest. This plan gives them an extra 180 days to pay the balance in full.
o Long-term payment plan (also called an installment agreement) – For taxpayers who have a total balance less than $50,000 in combined tax, penalties and interest. They can make monthly payments for up to 72 months. Taxpayers are encouraged to set up plan payments using direct debit (automatic bank withdraw), which eliminates the need to send a payment each month, saves postage costs, and reduces the chance of default. The IRS requires direct debit for balances between $25,000 and $50,000.
• Business taxpayers’ online payment plan options include:
o Long-term payment plan (also called an installment agreement) – For business taxpayers who have a total balance less than $25,000 in combined tax, penalties and interest from the current and preceding tax year. They can make monthly payments for up to 24 months. Taxpayers can choose to set up payments using direct debit (automatic bank withdraw) and requires it on balances between $10,000 and $25,000.
Online tools for payment plans
Qualified taxpayers with existing payment plans may be able to use the Online Payment Agreement to make changes to their plans that include revising payment dates, payment amounts or bank information for direct debit payments.
Individual taxpayers have the option to sign into or create their own Online Account. This account allows them to:
• Check on any scheduled or pending payments.
• Review payment plan details and payment history.
• View the amount they owe.
Payment options for taxpayers already working with the IRS
Individuals and out-of-business sole proprietors who are already working with the IRS to resolve a tax issue, and who owe $250,000 or less, have the option to propose a monthly payment that will pay the balance over the length of the collection statute – usually 10 years. These payment plans don’t require a financial statement, but a determination for the filing of a notice of federal tax lien still applies.
Find more information about the costs of payment plans on IRS.gov – Additional Information on Payment Plans.
WASHINGTON — The Internal Revenue Service today encouraged taxpayers who owe unpaid taxes and missed the April 18 tax deadline to file their 2022 federal income tax return and pay any tax due by Wednesday, June 14, to avoid a larger late-filing penalty.
Penalties and interest can grow quickly. The IRS reminded taxpayers about important payment programs that can help as well as the availability of special first-time penalty abatement relief for those who qualify.
Normally the late-filing penalty for each month — or part of a month that a return is late — is 5% of the unpaid tax, up to a maximum of 25 percent. The late-filing penalty will stop accruing once the taxpayer files.
But, by law, if a return is more than 60 days late, the minimum late-filing penalty, also known as a Failure to File penalty, is either $435 or 100% of the unpaid tax, whichever is less. This means the penalty will equal the tax due if the taxpayer owes $435 or less. If they owe more than $435, the minimum penalty will be $435.
The IRS must receive the return by June 14; returns mailed on that date normally won’t avoid the larger penalty. For that reason, the IRS recommends taxpayers file electronically by June 14.
In addition, taxpayers can limit late-payment penalties and interest charges by paying their tax electronically. The fastest and easiest way to do that is with IRS Direct Pay, a free service available only on IRS.gov. Several other electronic payment options are also available. Visit IRS.gov/payments for details.
Late-payment penalties and interest will stop accruing as soon as the tax is paid. The taxpayer need not figure any of these charges. Instead, the IRS will bill them for any amount due.
Taxpayers can review information on the Failure to File and the Failure to Pay penalties by visiting IRS.gov/penalties.
There are many important provisions that can help taxpayers in these situations.
Penalty relief for some
Taxpayers who have filed and paid on time and have not been assessed any penalties for the past three years often qualify to have the penalty abated. See the First-Time Penalty Abatement page on IRS.gov. A taxpayer who does not qualify for this relief may still qualify for penalty relief if their failure to file or pay on time was due to reasonable cause and not willful neglect.
Anyone who receives a penalty notice from the IRS should read it carefully and follow its instructions for requesting relief. See Penalty Relief on IRS.gov for the types of penalty relief and how to make the request.
In addition to penalties, interest will be charged on any tax not paid by the April 18 due date and any subsequent penalties. Interest stops accruing as soon as the balance due is paid in full. By law, interest abatement is not an option for reasonable cause or as first-time relief.
Options if unable to pay what’s owed
Many taxpayers mistakenly delay filing because they are unable to pay what they owe. Often, these taxpayers qualify for one of the payment options available from the IRS.
Individual taxpayer’s online payment plan options include:
• Short-term payment plans – for taxpayers who have a total balance less than $100,000 in combined tax, penalties and interest. This plan gives them an extra 180 days to pay the balance in full.
• Long-term payment plan (also called an installment agreement) – for taxpayers who have a total balance less than $50,000 in combined tax, penalties and interest. They can make monthly payments for up to 72 months. Taxpayers are encouraged to set up plan payments using direct debit (automatic bank withdraw), which eliminates the need to send a payment each month, saving postage costs, and reducing the chance of default. The IRS requires direct debit for balances between $25,000 and $50,000.
• Offer in Compromise — Some struggling taxpayers may qualify to settle their tax bill for less than the amount they owe by submitting an offer in compromise. To help determine eligibility, use the Offer in Compromise Pre-Qualifier tool.
Some automatically get more time to file
Some taxpayers get more time to file, even if they didn’t request an extension. These special deadlines affect penalty and interest calculations for those who qualify, such as members of the military serving in combat zones, taxpayers living outside the U.S. and those living in declared disaster areas.
Disaster areas
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in a federally declared disaster area when at least one area qualifies for the Federal Emergency Management Agency’s Individual Assistance program. Ordinarily, this means that taxpayers need not contact the IRS to get disaster tax relief. For details on all available relief, visit the Around the Nation page on IRS.gov.
Those serving in combat zones
Military service members and eligible support personnel serving in a combat zone have at least 180 days after they leave the combat zone to file their tax returns and pay any tax due. A complete list of designated combat zone localities is in Publication 3, Armed Forces’ Tax Guide, available on IRS.gov.
Combat zone extensions also give affected taxpayers more time for a variety of other tax-related actions. Various circumstances affect the exact length of the extension available to taxpayers. Details, including examples illustrating how these extensions are calculated, are in the Extensions of Deadlines section in Publication 3.
Taxpayers, military on duty living outside the United States
U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico are granted an automatic two-month extension, until June 15, 2023, to file their 2022 tax returns and pay any tax due.
The special June 15 deadline also applies to members of the military on duty outside the U.S. and Puerto Rico who do not qualify for the longer combat zone extension. Affected taxpayers should attach a statement to their return explaining which of these situations apply. For more information about the special tax rules for U.S. taxpayers abroad, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, on IRS.gov.
When to check withholding
To protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year, taxpayers should check their withholding every year. For help determining the right amount to withhold, use the Tax Withholding Estimator on IRS.gov.
Form 1099-K, Payment Card and Third-Party Network Transactions, is an IRS form that is used to report certain payment transactions.
If taxpayers receive a Form 1099-K, they should use that information with their other tax records to determine their correct tax liability. Taxpayers must report all their income on their tax return unless it’s excluded by law, regardless of whether they receive a Form 1099-K.
Taxpayers will receive Form 1099-K for business transactions, including income from:
• A business the taxpayer owns.
• Self-employment.
• Activities in the gig economy.
• The sale of personal items and assets.
Money received as a gift or for reimbursement does not require a 1099-K. Taxpayers can minimize the chance of an error by asking friends or family members to correctly designate that type of payment as a non-business-related transaction. The taxpayer should also make a note of what the payment was for and who sent it. Good recordkeeping is key.
What to do when a Form 1099-K is incorrect
Some taxpayers may have received a Form 1099-K for the sale of personal items, or Form 1099-K may have been issued in error – such as for transactions between friends and family, or expense sharing.
If the information is incorrect on the Form 1099-K, taxpayers should contact the issuer immediately. The issuing organization’s name appears in the upper left corner on the form. Taxpayers should keep a copy of all correspondence with the issuer for their records.
If a taxpayer receives a Form 1099-K in error and the taxpayer cannot obtain a corrected Form 1099-K, the taxpayers should follow the IRS’ updated guidance at Understanding Your Form 1099-K.
1099-K reporting threshold for tax year 2023
The American Rescue Plan of 2021 changed the reporting threshold requirement for payment apps, also known as third-party settlement organizations. The IRS announced that the new Form 1099-K reporting threshold will start in tax year 2023.
• The old threshold was $20,000 and 200 transactions per year. This applies to tax year 2022 and prior years.
• The new threshold is more than $600. This applies to tax year 2023 and future years.
The threshold change means some people may receive a Form 1099-K who have not received one in the past. There are no changes to what counts as income or how tax is calculated.
WASHINGTON ― With the tax deadline approaching, the IRS reminded taxpayers they can avoid late filing and interest penalties by submitting their tax return and any payments due by April 18. For struggling taxpayers who can’t pay by the deadline, the IRS offers several different options to help.
The IRS also provides multiple ways for people to file for an extension, get information to help file their tax return and learn about payment options if they have trouble paying by the April 18 deadline.
An extension will help to avoid penalties and interest for failing to file on time, and gives taxpayers until Oct. 16, 2023, to file. However, they still must pay what they owe by the April 18 deadline.
Except for eligible victims of recent natural disasters who have until Oct. 16 to make various tax payments, taxpayers who can’t pay the full amount of taxes they owe by April 18 should file and pay what they can to reduce total penalties and interest.
There are several ways to make electronic payments, and there are options for a payment plan or agreement.
IRS Online Account
An IRS Online Account provides access to important information when preparing to file a tax return, pay a balance or follow up on notices. Taxpayers can view their:
• Adjusted Gross Income.
• Payment history and any scheduled or pending payments.
• Payment plan details.
• Digital copies of select notices from the IRS.
Taxpayers can also use their Online Account to securely make a same-day payment for an outstanding 2022 tax balance, pay quarterly estimated taxes for the 2023 tax season or request an extension to file a 2022 return.
Interest and a late payment penalty will apply to any payments made after April 18. Making a payment, even a partial payment, will help limit penalty and interest charges.
Other options to pay electronically
Direct Pay, available only on IRS.gov, is the fastest and easiest way to make a one-time payment without signing into an IRS Online Account.
• Direct Pay: Direct Pay is free and allows taxpayers to securely pay their federal taxes directly from their checking or savings account without any fees or preregistration. Taxpayers can schedule payments up to 365 days in advance. After submitting a payment through Direct Pay, taxpayers will receive immediate confirmation.
• Electronic Funds Withdrawal (EFW): This option allows taxpayers to file and pay electronically from their bank account when using tax preparation software or a tax professional. This option is free and only available when electronically filing a tax return.
• Electronic Federal Tax Payment System: This free service gives taxpayers a safe and convenient way to pay individual and business taxes by phone or online. To enroll and for more information, taxpayers can call 800-555-4477 or visit eftps.gov.
• Debit or credit card or digital wallet: Individuals can pay online, by phone or with a mobile device through any of the authorized payment processors. The processor charges a fee. The IRS doesn’t receive any fees for these payments. Authorized card processors and phone numbers are available at IRS.gov/payments.
Other payment options:
• Cash: For taxpayers who prefer to pay in cash, the IRS offers a way to pay taxes at one of its Cash Processing Company services. The IRS urges taxpayers choosing this option to start early because it involves a four-step process. Details, including answers to frequently asked questions, are at IRS.gov/paywithcash.
• Check or money order: Payments made by check or money order should be made payable to the “United States Treasury.” To help ensure that the payment gets credited promptly, taxpayers should also enclose a 2022 Form 1040-V payment voucher and print the following on the front of the check or money order:
o “2022 Form 1040”
o Name
o Address
o Daytime phone number
o Social Security number
For taxpayers who cannot pay in full
The IRS encourages taxpayers who cannot pay in full to pay what they can and consider a variety of payment options available for the remaining balance including getting a loan to pay the amount due. In many cases, loan costs may be lower than the combination of interest and penalties the IRS must charge under federal law. Taxpayers should act as quickly as possible: Tax bills accumulate more interest and fees the longer they remain unpaid. For all payment options, visit IRS.gov/payments.
Online self-service payment plans
Most individual taxpayers qualify for a payment plan and can use Online Payment Agreement to set up a payment plan (including an installment agreement) to pay off an outstanding balance over time.
Once the online application is completed, the taxpayer receives immediate notification of whether their payment plan has been approved. Taxpayers can setup a plan using the Online Payment Agreement in a matter of minutes. There’s no paperwork and no need to call, write or visit the IRS. Setup fees may apply for some types of plans.
Online payment plan options for individual taxpayers include:
• Short-term payment plan – The total balance owed is less than $100,000 in combined tax, penalties and interest. Additional time of up to 180 days to pay the balance in full.
• Long-term payment plan (installment agreement) – The total balance owed is less than $50,000 in combined tax, penalties and interest. Pay in monthly payments for up to 72 months. Payments may be set up using direct debit (automatic bank withdraw) which eliminates the need to send in a payment each month, saving postage costs, and reducing the chance of default. For balances between $25,000 and $50,000, direct debit is required.
Qualified taxpayers with existing payment plans may be able to use the Online Payment Agreement to make changes including revising payment dates, payment amounts or bank information for payments made by direct debit. Go to Online Payment Agreement for more information.
Though interest and late-payment penalties continue to accrue on any unpaid taxes after April 18, the failure to pay the tax penalty rate is cut in half while an installment agreement is in effect. Find more information about the costs of payment plans on the IRS’ Additional Information on Payment Plans webpage.
Other payment options
Taxpayers struggling to meet their tax obligation may also consider these additional payment options:
• Offer in Compromise – Certain taxpayers qualify to settle their tax liabilities for less than the total amount they owe by submitting an Offer in Compromise. To help determine their eligibility, they can use the Offer in Compromise Pre-Qualifier tool. To help taxpayers prepare their own valid Offers in Compromise, the IRS created an Offer in Compromise video playlist – also available in Spanish and Simplified Chinese – that walks them through the necessary paperwork.
• Temporary delay of collection – Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer’s financial condition improves. Penalties and interest continue to accrue until the full amount is paid.
• Other payment plan options – Taxpayers who do not qualify for online self-service should contact the IRS using the phone number or address on their most recent notice for other payment plan options. For individuals and out-of-business sole proprietors who are already working with IRS Campus Collection and who owe $250,000 or less, one available option is to propose a monthly payment that will pay the balance over the length of the Collection Statute (usually 10 years). These payment plans don’t require a financial statement, but they do require a determination for the filing of a Notice of Federal Tax Lien still applies.
For more information about payments, see Topic No. 202, Tax Payment Options, on IRS.gov.
Taxpayers who aren’t able to file by the April 18, 2023, deadline can request an extension before that deadline, but they should know that an extension to file is not an extension to pay taxes. If they owe taxes, they should pay them before the due date to avoid potential penalties and interest on the amount owed.
Taxpayers who request a six-month extension to file their taxes have until October 16, 2023, to file their 2022 federal income tax return.
How to request a free extension to file for a return with no tax due
Individual taxpayers, regardless of income, can use IRS Free File at IRS.gov/FreeFile to request an automatic six-month tax-filing extension. Alternatively, taxpayers can file Form 4868, Application for Automatic Extension of Time to File.
How to request an extension when making a payment for a return with taxes due
Taxpayers can choose to submit an electronic payment and select Form 4868 or extension as the payment type. The IRS will count it as an extension automatically, and taxpayers won’t need to file Form 4868.
Victims in FEMA disaster areas may have an automatic extension
The IRS may offer an automatic extension to areas designated by the Federal Emergency Management Agency. To check whether an area is included, see IRS.gov/disasters. Taxpayers in the affected areas do not need to file any extension paperwork, and they do not need to call the IRS to qualify for the extended time.