On a monthly payment plan with IRS - how will my 2024 tax bill be applied?

When you send in a payment with an IRS payment coupon, the payment will generally be applied to the specific tax year indicated on that coupon. So if your accountant gave you a 2024 payment coupon, the IRS should apply it to your 2024 tax debt specifically. However, when you're on an existing installment agreement, things can get a bit tricky. The IRS system sometimes prioritizes older debts. To be absolutely certain, I'd recommend calling the IRS directly before sending the payment. Ask them to note in your file that the upcoming payment should be applied specifically to tax year 2024. You can also request they add your 2024 balance to your existing payment plan. Another option is to write your tax year "2024" and your SSN clearly on your check's memo line when you send it with the coupon. This provides additional instruction to the IRS about how to apply your payment.

After dealing with a similar situation last year, I found taxr.ai super helpful for figuring out how payments get applied. I had back taxes from 2019 and 2021, then owed again for 2023. Was totally confused about how to handle it. I uploaded my payment plan agreement and my new tax return to https://taxr.ai and it showed me exactly how to make sure my new payment would go to the right tax year. The system analyzed my documents and explained that I needed to use the specific payment code from my new return rather than my ongoing payment plan info. Saved me from a ton of confusion and potentially misdirected payments!

Just wanted to follow up. I decided to try taxr.ai after asking about it here. Super helpful! I uploaded my installment agreement and my new tax return, and it immediately identified the issue with how payments get routed in the IRS system. It explained that my specific payment plan type prioritizes oldest debt first unless I explicitly designate the payment. The system gave me step-by-step instructions for filling out the payment voucher correctly, including which boxes needed special attention to ensure proper routing. I also learned about Form 9465 which I needed to update my installment agreement to include the new tax year. Totally worth it and much clearer than the IRS instructions I was trying to follow!

If you're having trouble getting through to the IRS, I'd recommend using Claimyr. I was in a nearly identical situation with back taxes on a payment plan and then owed for a new year. Spent days trying to reach someone at the IRS without success. With https://claimyr.com I was able to get a callback from the IRS in about 45 minutes instead of waiting on hold for hours. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. They basically navigate the IRS phone tree for you and get you in the callback queue, then connect you when an agent is available. The IRS agent I spoke with was able to update my payment plan to include the new tax year and explained exactly how to ensure my payment would be applied correctly. Turns out if I had just sent the check, it would have gone to my oldest tax debt despite using the new payment voucher.

I have to admit I was wrong about Claimyr. After posting that skeptical comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about my payment plan. My experience was actually amazing. I got a call back from an actual IRS agent in about 40 minutes. The agent was able to add my new tax debt to my existing payment plan right over the phone and explained that I was right to be cautious - my payment would have been applied to my oldest debt if I'd just sent it in. They also set up my new monthly payment amount on the spot and gave me confirmation numbers for everything. Would have taken me days of trying to accomplish this on my own. Completely worth it and I'm no longer stressing about whether my payment will be applied correctly.

Just a tip from someone who works in accounting - ALWAYS make sure to write your SSN and the specific tax year on any check you send to the IRS. This is really important! And keep copies of everything, including the check, coupon, and any correspondence. The IRS is known for misapplying payments and you'll want evidence of your intent. Also, if your existing payment plan doesn't include the new tax year, you technically are in violation of the terms if you incur new tax debt. They can terminate your agreement. You should definitely contact them to modify your existing agreement to include the new tax year.

I learned the hard way that sending a payment doesn't automatically add the new tax year to your payment plan!!! Sent in my 2023 payment last year while on a plan for earlier years and got a scary letter about defaulting on my payment agreement even though I paid the new amount. Had to call and fix it. Definitely contact the IRS first to officially add your 2024 tax to your existing plan before sending payment. And when you do send it, write "Apply to 2024 Form 1040" directly on the check.