IRS Payment Plan Calculator
Estimate total costs of an IRS payment plan including setup fees, interest, and penalties.
Tax Debt Details
Long-Term (Direct Debit)
$334/month
43 payments · Total cost: $14,352
Cost Breakdown
Extra cost over original debt: $2,352 (20% more)
Plan Comparison
| Plan | Setup Fee | Monthly | Total Cost |
|---|---|---|---|
| Pay in Full Now | $0 | $12,000 | $12,130 |
| Short-Term (≤180 days) | $0 | $2,000 | $12,472 |
| Long-Term (Direct Debit) | $31 | $334 | $14,278 |
| Long-Term (Check/Money Order) | $130 | $334 | $14,377 |
Tips
- Always file on time even if you can't pay — the failure-to-file penalty is 10x the failure-to-pay penalty.
- You can apply online at IRS.gov for installment agreements under $50,000.
- Interest is compounded daily. Paying more each month significantly reduces total cost.
IRS Payment Plan Options
If you can't pay your full tax bill, the worst thing to do is ignore it. The IRS offers several payment plans, and setting one up reduces your failure-to-pay penalty from 0.5% per month to 0.25% per month. Always file your return on time even if you can't pay — the failure-to-file penalty (5% per month) is ten times higher than failure-to-pay.
IRS Payment Plan Comparison (2026)
| Plan Type | Setup Fee (Online) | Balance Limit | Payment Period |
|---|---|---|---|
| Short-Term | $0 | Up to $100,000 | Up to 180 days |
| Long-Term (Direct Debit) | $31 | Up to $50,000 | Up to 72 months |
| Long-Term (Check/Mail) | $130 | Up to $50,000 | Up to 72 months |
| Low-Income (Direct Debit) | $0 | Up to $50,000 | Up to 72 months |
IRS Penalties and Interest Rates
| Type | Rate | Maximum |
|---|---|---|
| Failure to File | 5% per month | 25% of tax owed |
| Failure to Pay | 0.5% per month (0.25% with plan) | 25% of tax owed |
| Interest | 7% annually (Q1 2026) | No maximum |
| Combined max | — | 47.5% + interest |
Frequently Asked Questions
Can the IRS take my home or wages?
If you set up a payment plan and stay current, the IRS generally won't pursue collections. If you ignore the debt, the IRS can file a tax lien (affecting your credit), levy bank accounts, or garnish wages. Setting up a plan protects you from these actions.
What is an Offer in Compromise?
An OIC lets you settle your tax debt for less than the full amount. The IRS accepts them only if you can't pay the full amount within the collection statute (10 years). The acceptance rate is around 40%, and the process takes 6-12 months. Use Form 656 to apply, with a $205 filing fee.
See also: Federal Tax Calculator and Budget Planner.