Video instructions and help with filling out and completing Form 2220 Installments

Instructions and Help about Form 2220 Installments

Music can I make installment payments on my tax bill that's the question we're gonna answer here today my name is Darren tee measures they call me the IRS solution attorney and the answer like so many of these is it really depends if you owe you know eight thousand dollars most certainly you can enter into what's called an installment agreement with the IRS basically the rule is here we're gonna divide the eight thousand dollars by 72 and whatever that number equals plus a little bit for penalties in interest you know ten fifteen twenty-five bucks then that's going to be the amount of your installment payment now if you owe more than fifty thousand dollars it gets more complicated because if you owe more than fifty thousand dollars you're not entitled to what's called a streamlined installment agreement and you have to do what I call complex installment agreement it's complex because the IRS is going to determine what their opinion of your reasonable or your monthly disposable income is and then they're gonna ask you demand that really that you pay that on a monthly basis so your monthly disposable income is the difference between your gross income minus your business expenses if that applies and then minus your allowable expenses and that equals the amount of your monthly disposable income and there's really no way without looking at your particular financial situation to determine what your monthly disposable income is because there's so many facts and circumstances that vary now if you make $300,000 and you owe you know 75 thousand dollars then the IRS is going to you know they're going to demand that you pay your monthly disposable income well how much is your monthly disposable income in that situation it depends it depends on where you live it spends on where you have how you spend your money you know if you live in San Francisco or Manhattan then your housing expenses your allowable expenses are much higher than if you leave then if you live in Topeka Kansas that's just the fact of the matter and so if you lived in Topeka you'd have quite a lot of money left over typically and if you lived in San Francisco or Manhattan maybe much less because of housing costs alone as well as transportation costs so that's one of the things there's also something called the six year rule now and then basically that means that the IRS will deviate a little bit from that $50,000 if if you will full pay the entire tax liability within the six years that kind of depends on the facts of the circumstances as well it also depends on your what your financials demonstrate now there's a pilot program going on right now with Appeals and IRS appeals and they're agreeing to raise that $50,000 limit all the way up to as much as $100,000 and so we've had some success in those situations so yes you can have a payment plan for your tax liability will the payment plan be something that you're interested in I don't know we like to call those properly structured installment agreements so if you think you need a payment plan then you really should give us a call so we can talk to you about a properly structured structure of installment agreement there's also a strategy where sometimes if you more than $50,000 it might make sense to pay it down pay the liability down to $50,000 so that you could enter into that streamlined installment agreement why you ask well one of the reasons could be you think about it if you if you less than $50,000 you don't have to provide them those detailed financials so you don't have to go through all that headache of providing and documenting all your financials all your you know your income and your expenses but also if your installment agreement fails the you know if it gets defaulted and you've provided them those detailed financials what have you done well you've provided them a road map to collection from you in the future list of all your assets all your income everything and so unless you'd have to you really don't want to do that I would say you know I would submit to you so if you have questions about this or really anything else having to do with IRS problems we invite you to visit our website at get IRS help calm Music you