What’s the Least You Can Pay Monthly on an IRS Payment Plan?

Key Takeaways

• Your minimum monthly payment is typically your total tax balance divided by 72 months.
• You can apply online, by phone, or by mail to set up an IRS installment plan.
• The type of installment agreement you qualify for depends on how much you owe.
• Using direct debit from your bank account can reduce your setup fee and help you avoid missed payments.

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If you’re facing a large tax bill and can’t pay it all at once, you’re not alone, especially in a city like Dallas, TX, where living expenses can stretch your budget. Fortunately, the IRS offers relief through an installment agreement, letting you make monthly payments on your unpaid taxes while avoiding aggressive collections.

In this guide, I’ll walk you through how to apply for a payment plan, understand your minimum monthly payment, the different IRS plan options based on your tax balance, and how to stay compliant once enrolled.

What Is an IRS Installment Plan?

An IRS installment plan (or installment agreement) is a formal payment plan that lets you pay your federal tax debt over time. It’s ideal for individual taxpayers who cannot afford a lump sum payment but want to avoid levies or garnishments.

With the IRS, there is no one-size-fits-all. The type of installment agreement you qualify for—and the terms—depend on your total balance due and your financial situation.

How the IRS Determines Your Minimum Monthly Payment

The IRS usually calculates your minimum monthly payment by dividing your tax balance by 72 months. For example:

If you owe $7,200:
$7,200 ÷ 72 months = $100 per month

However, if you’re experiencing financial hardship, you can request a lower payment amount by submitting a collection information statement (Form 433-A or 433-F). This shows your income, adjusted gross income, expenses, and bank account details to support your case.

How to Apply for a Payment Plan

There are three ways to apply for an IRS installment plan:

• Apply online via the IRS Online Payment Agreement tool
• Mail a completed installment agreement request (Form 9465)
• Call the IRS and provide your financial and account information

Before applying, make sure all required returns are filed and you’re current on estimated taxes, if applicable.

IRS Installment Plans by Balance Owed

The type of IRS payment plan you qualify for depends on how much you owe:

Balance of $10,000 or Below – Guaranteed Installment Agreement

If you owe $10,000 or less, the IRS will usually approve your installment agreement automatically if:

• You’ve filed all required tax returns
• You haven’t had an existing payment plan in the past five years
• You can pay off the balance due within 36 months
• You agree to stay compliant with all future taxes

No financial documentation is needed, and approval is fast. This is one of the most straightforward IRS options for individual taxpayers.

Balance Between $10,000 and $50,000 – Streamlined Installment Agreement

If your tax balance falls between $10,000 and $50,000, you may qualify for a streamlined payment agreement, which typically gives you up to 72 months to pay.

To qualify, you must:

• Use direct debit or payroll deduction if you owe more than $25,000
• File all required returns
• Have no existing payment plan defaults

No financial statements are needed unless you can't meet the default monthly payment formula.

Tip: Setting up direct debit payments from your bank account can reduce your setup fee and ensure you never miss a monthly payment due date.

Balance Over $50,000 – Full Financial Disclosure Required

If you owe more than $50,000, the IRS requires additional documentation. You must:

• Submit Form 9465 and a collection information statement (Form 433-A or 433-F)
• Provide details about your bank routing, income, account numbers, assets, and liabilities
• Mail your installment payment request—online or phone setup isn’t allowed

This type of long-term payment plan often takes more time for IRS review, but many tax professionals in Dallas can help streamline the process.

IRS Installment Plan Fees and Costs

Your setup fee depends on how you make your payments:

• $0 for a short-term payment plan (paid within 180 days)
• $22 for direct debit via online setup
• $69 for other methods like money order or check
• $107–$178 if you apply by phone or mail

If you’re a low income taxpayer, you may qualify for reduced or waived user fees.

Accepted Payment Methods

The IRS accepts several options for making your installment payments:

• Direct debit from your bank account
• Payroll deduction
• Online payments via credit/debit card (may include fees)
• Money order or check

Setting up automatic withdrawals from your bank account is recommended to avoid missed payments and late penalties.

Staying Compliant Once Enrolled

Once your installment agreement is active, it’s critical to:

• Pay on time each month
• File all tax returns during each tax year
• Keep up with estimated taxes if self-employed
• Avoid triggering a default on your payment agreement

Failure to comply may lead to cancellation of your plan, the return of penalties and interest, or IRS collection actions.

Why Dallas Taxpayers Use IRS Installment Plans

In a city like Dallas, managing your federal tax debt alongside daily living costs can be difficult. The IRS installment plan gives people breathing room. With the right setup—such as direct debit and an optimized payment agreement—you can stay on track without added financial strain.

Working with experienced tax professionals can help ensure that you:

• Choose the best plan based on your tax balance
• File accurate installment agreement requests
• Stay compliant with IRS payment plan rules

Final Thoughts: Resolve Your Tax Debt with Confidence

The IRS installment plan offers a realistic and structured path for resolving unpaid taxes. Whether you owe a few thousand or more than $50,000, knowing your options—and acting fast—can save you from long-term stress, interest and penalties, and legal consequences.

If you're in Dallas, TX, and need help choosing the right IRS payment plan, or understanding your minimum monthly payment, now’s the time to act.

Get Expert Help with Margolies Law Office

When navigating the complexities of IRS installment plans and tax debt, Margolies Law Office is here to provide you with trusted, professional support. Our experienced team specializes in negotiating installment payment agreements, handling financial documentation, and ensuring you stay compliant with IRS requirements. Don’t face tax challenges alone—let us help you find the best solution tailored to your needs.

Contact Margolies Law Office today to take control of your tax situation and secure peace of mind.

Frequently Asked Questions

1. Will the IRS approve my request automatically?

If you meet the requirements and owe less than $10,000, the IRS approves it automatically. Otherwise, approval depends on your eligibility and documentation.

2. What happens if I miss a payment?

Missing your monthly payment could result in cancellation of your installment agreement, reinstatement of full penalties and interest, and even levies. Use automatic withdrawals if possible.

3. Can I pay off the full amount early?

Yes. You can pay off your tax balance early or increase your payment amount at any time to reduce interest.

4. Can I renegotiate my payment plan?

Yes. If your financial situation changes, you can modify your installment payment by submitting a new installment agreement request.

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