In our last post, we examined three different options people have when it comes to resolving state tax debt. In this post, we will look a little more closely at one of the options available: repayment with an installment agreement.
An installment agreement allows you to repay taxes over time with smaller chunks of payments. This solution can provide considerable relief to people who are trying to repay taxes but cannot afford to do so all at once. Below, we will look more closely at these agreements.
One of the main concerns people have about repayment plans is how much will need to be paid. As noted by the Georgia Department of Revenue, the payments you make will:
- Depend on the overall amount you owe
- Generally need to be at least enough to cover the interest on the unpaid taxes
- Continue until the debt has been repaid
Situations arise over time that might affect your ability to pay the amount dictated in your agreement. If this happens, you should know that:
- You can pay off your debt early by increasing payments or submitting additional payments
- If changes are necessary, the existing agreement will be terminated and a new agreement, which is subject to fees, will need to be set up
- If you don’t have enough money in your bank account for the state to withdraw a payment, you will face returned check fees, overdraft fees and your plan can be defaulted
Despite all these specifications and requirements that come with a repayment plan, it can be your best option for dealing with tax debt. However, before you agree to anything or make a decision on how or if to remedy your unpaid taxes, you may want to discuss your situation with an attorney. With legal guidance, you can address or challenge back taxes in a manner that best suits your individual situation and needs.