How long do I have to pay back IRS debt for my small business?

I owe the IRS way more than I expected and I'm freaking out about the timeline to pay it all. My small business operates on 1099 income, and I filed our partnership return for 2023 late, which resulted in us owing almost $5,600. I received a notice saying I have until March 24th to pay this amount. On top of that, I also owe around $8,100 for 2024. The tax preparer I worked with mentioned something about setting up a payment plan for the $8,100, but I'm completely in the dark about how these payment plans work. How long will the IRS give me to pay off these debts? Can I set up a payment plan for both years or do I need separate arrangements? My business doesn't have a ton of cash flow right now and I'm honestly losing sleep over this. Any advice would be so appreciated!!

0 coins

18 comments

Amina Diallo

•8M

You definitely have options here! The IRS offers several payment plans depending on your situation. For your 2023 tax debt of $5,600 due March 24th, you can set up a short-term payment plan (paying within 180 days) or a long-term installment agreement. Same goes for your 2024 debt of $8,100. The easiest option would be to apply for an Online Payment Agreement through the IRS website for debts under $50,000. You can combine both years into one payment plan. For businesses, the typical maximum term is 72 months, but this depends on your specific situation and ability to pay. There will be setup fees ($31-$130 depending on how you apply and pay), and interest/penalties continue to accrue, but at a lower rate than if you don't set up a plan. Don't stress too much - the IRS is actually pretty reasonable about payment plans. The most important thing is to take action before the March 24th deadline to avoid additional penalties.

0 coins

Amina Diallo

•8M

The IRS doesn't perform a credit check when you apply for a payment plan. They're more concerned with your filing compliance (having all required returns filed) and your payment history with them. As long as you've filed all required returns and haven't defaulted on a previous payment plan recently, you should be fine regardless of your credit score. The key factor is setting a monthly payment amount that you can consistently make. If you default on the payment plan, it becomes much harder to set up another one in the future.

0 coins

Natasha Orlova

•8M

I went through something similar last year with about $12k in back taxes from my consulting business. I discovered taxr.ai (https://taxr.ai) and it was honestly a game changer. Their system analyzed my tax documents and helped me understand exactly what payment options I qualified for based on my specific situation. The coolest part was they showed me that I could get some penalties reduced that my accountant missed, which saved me almost $1300! They have this feature that compares your situation to IRS guidelines and shows you exactly what to request and how to frame it. I was pretty surprised at how straightforward they made everything.

0 coins

Natasha Orlova

•8M

You mainly just upload the tax notices you received and any returns related to the debt. It was way less paperwork than I expected - took me maybe 15 minutes total. The system extracts the important information automatically. The difference from calling the IRS directly is night and day. When you call the IRS, you're basically at the mercy of whoever answers and their interpretation of your situation. With taxr.ai, you get a clear analysis of your options based on actual regulations and precedents. It helps you understand what you're legally entitled to request, which gives you leverage when dealing with the IRS. In my case, it saved me far more than it cost.

0 coins

Emma Wilson

•8M

I have to admit I was wrong about taxr.ai. After my skeptical comment, I decided to try it for my $17k tax bill from my failed startup. The analysis showed me I qualified for Currently Not Collectible status (something no one had mentioned to me before) which temporarily paused all collections while I get back on my feet. What impressed me most was how quickly they identified specific sections of the tax code that applied to my situation. This gave me confidence when speaking with the IRS because I could reference exact policies. They even provided me with a script for negotiating my penalties down. Ended up saving over $3k and got a manageable payment plan for the rest. For anyone drowning in tax debt like I was - definitely worth checking out.

0 coins

Malik Thomas

•8M

If you need to actually talk to someone at the IRS about your payment options (which I HIGHLY recommend), good luck getting through their phone system. I spent 3 weeks trying to reach someone about my payment plan options and kept getting disconnected. Then I found Claimyr (https://claimyr.com) which basically holds your place in the IRS phone queue and calls you back when an agent is about to answer. You can see how it works here: https://youtu.be/_kiP6q8DX5c This saved me so much time and frustration. I finally got through to someone who helped me set up a 72-month payment plan for my $14k in back taxes. The IRS agent even helped me figure out how to lower my monthly payment amount by better documenting my business expenses.

0 coins

Malik Thomas

•8M

It uses a combination of automated systems and real people. They call the IRS, navigate the menu options, wait in the queue, and then call you when they're about to connect with an agent. It's that simple. I was connected with an actual IRS representative within about 2 hours of using the service, compared to the days I spent trying on my own and never getting through. The IRS agent I spoke with was able to look at both my tax years and combine them into a single payment plan. They even waived one of the failure-to-pay penalties after I explained my situation.

0 coins

Emma Wilson

•8M

I feel like a complete idiot for doubting Claimyr. After my skeptical comment, I figured I'd try it since nothing else was working. I had been trying to reach the IRS for WEEKS about my $11k tax bill with no success. Used Claimyr yesterday and got a call back in about 90 minutes. The IRS agent I spoke with was actually super helpful (shocking, I know). She set me up with a 60-month payment plan that I can actually afford, and explained that I could always pay more when business is good to reduce the interest. The best part? She found a calculation error on one of my estimated tax payments that reduced my total debt by almost $900! Never would have discovered that if I hadn't been able to actually speak with someone. For anyone struggling to reach the IRS, this service is legitimately worth it.

0 coins

Isabella Costa

•8M

The failure-to-pay penalty stops when it reaches 25% of the unpaid tax. So if you owe $5,000 in tax, the maximum penalty would be $1,250. However, interest continues indefinitely until the debt is fully paid. One thing I learned through my payment plan is that the IRS applies payments to penalties first, then interest, then the tax principal. This means if you're only making minimum payments, a larger portion goes to penalties and interest rather than reducing your actual tax debt.

0 coins