i just found out I screwed up on my 2005 and owe the IRS. Oh well such is life, they sent me the paperwork to do a payment plan and that is what I will do. My question is will this effect my refund I should get this year or do they keep things seperate unless I default on payments? Please only serious answers!!!
2007-01-11 03:59:42 · 4 answers · asked by Needingsomeadvice 4 in Business & Finance ➔ Taxes ➔ United States
Since you just got the letter, I would get my taxes done for 2006 right away and if there is a refund, file immediately. Your refund will be kept if less than your past due taxes. It will reduce the amount you owe. Then figure out the payments.
Read the instructions for the installment agreement. You are charged $105 just to set up the agreement if you send payments directly to them and $52 if you have the payments come from a bank account. So you may want to pay without an agreement if you can pay it off rather quickly.
2007-01-11 05:30:29 · answer #1 · answered by ninasgramma 7 · 0⤊ 1⤋
Will I Still Get My Tax Refunds if I have an Installment Agreement?
As a condition of your installment agreement, any refund due to you in a future year will be applied against the amount you owe. Therefore, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support. The IRS will automatically apply the refund to the taxes owed. If the amount of your refund does not take care of the tax debt; then your installment agreement continues until all of the terms are met.
My advice is to try to adjust your w4 so excess tax is not taken out or it will go to the payments.
2007-01-11 12:03:24 · answer #2 · answered by Barkley Hound 7 · 0⤊ 0⤋
Whether or not you're making payments to the IRS, If you owe them an outstanding balance, they will take a portion/or all of your 2006 refund to pay off the debt. Just let them take it out of your refund, if you have one.
2007-01-11 12:03:32 · answer #3 · answered by Fool in the Rain 6 · 0⤊ 0⤋
they will take the money out from your refund.
2007-01-11 12:04:10 · answer #4 · answered by Jacob S 2 · 0⤊ 0⤋