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Started By
Message
Money Talk Tax Experts - Installment Agreements for Personal Income Taxes
Posted on 1/15/15 at 10:00 am
Posted on 1/15/15 at 10:00 am
So last year my wife and I discovered we incorrectly calculated our taxes based on our withholding. Instead of throwing down over $1,000 in taxes on the 15th of April, we opted for an installment agreement.
Each month we've logged on and made our payments as per the timeline of the arrangement (the 15th of the month), and as of today, we've paid $125+ the small online convenience charge 10 times. Counting back to April, this adds up to $1,250 even towards taxes (the convenience fees are not included obviously).
We received a statement from the IRS stating that as of November we owed $477 and change. I don't have my taxes with me at my office but I was pretty surprised that they tacked on or could take on what amounts to about 20% in interest on the taxees we owed on the basis of our installment agreement.
My question is whether this is typical, or have they miscalculated what is owed? The person who prepared our taxes did not mention any additional charges associated with the Installment agreement and it would've annoyed me but I would've paid all at once in a lump sum had I known there would be additional penalties or interest added to my taxes.
If I overlooked this or my preparer failed to inform me or if I forgot it's not the end of the world. I'd just like to know going forward.
Each month we've logged on and made our payments as per the timeline of the arrangement (the 15th of the month), and as of today, we've paid $125+ the small online convenience charge 10 times. Counting back to April, this adds up to $1,250 even towards taxes (the convenience fees are not included obviously).
We received a statement from the IRS stating that as of November we owed $477 and change. I don't have my taxes with me at my office but I was pretty surprised that they tacked on or could take on what amounts to about 20% in interest on the taxees we owed on the basis of our installment agreement.
My question is whether this is typical, or have they miscalculated what is owed? The person who prepared our taxes did not mention any additional charges associated with the Installment agreement and it would've annoyed me but I would've paid all at once in a lump sum had I known there would be additional penalties or interest added to my taxes.
If I overlooked this or my preparer failed to inform me or if I forgot it's not the end of the world. I'd just like to know going forward.
5
Posted on 1/15/15 at 10:08 am to GFunk
Interest does accrue beginning 4/15 even with an installment agreement, but that amount does seem high if it's all interest. What was the original amount due?
Posted on 1/15/15 at 10:21 am to GFunk
The IRS seems to be pretty behind on stuff like this. I received two notices last year about taxes owed after they cashed each one of the checks paying them. A couple weeks after the last letter they sent saying I owed 10k, they sent me a refund. I'd call someone and make sure but it seems like they lag way behind on payment updates.
Posted on 1/15/15 at 10:33 am to GFunk
You do continue paying late interest and late payment penalty on the remaining balance until it is paid off.
You should be able to tell by the statement what charges are being applied.
I'm assuming you filed the actual return on time.
You should be able to tell by the statement what charges are being applied.
I'm assuming you filed the actual return on time.
Posted on 1/15/15 at 10:48 am to LSUFanHouston
Filed the return prior to the deadline, yes. Thanks to all for the information. Without having the form with me, all I can recall is that it was received in November and it mentioned $477.
I'll go home and check my records more closely tonight. Thanks to all who responded.
I'll go home and check my records more closely tonight. Thanks to all who responded.
Posted on 1/15/15 at 10:53 am to GFunk
quote:How many payment did you make as of November? You hadn't made 10 payments by then. More likely 6 or 7. You will have made 3 more payments against that $477, so the next letter you get from the IRS reminding you to make your payment may have a payoff amount of less than $125.
We received a statement from the IRS stating that as of November we owed $477 and change.
Posted on 1/15/15 at 10:53 am to GFunk
Always find a way to pony up the entire amount if even remotely possible. Interest, penalties and fees suck.
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