How to Set Up Payment with Taxes When Your Online Account Shows ‘Payment Status Unavailable’
If you're facing issues with your tax payment and your online account shows a 'Payment Status Unavailable' message, or it doesn't specify the amount you owe, you might find it challenging to make a payment, especially when the total is too high to pay in a single payment. In this guide, we'll walk you through setting up a payment plan and understanding potential penalties.
What to Do When Your Online Account Implies 'Payment Status Unavailable'
When your online tax account displays 'Payment Status Unavailable', it usually means you need to take some proactive steps to resolve the situation. Here are the actions you can take:
1. Check the Tax Return You Filed
First, review the tax return you filed. It should contain the amount of tax you are supposed to pay. This amount is what you need to use to start a payment plan. The IRS (Internal Revenue Service) or equivalent tax authority does not need to inform you of the specific tax due because it is clearly stated on the document you submitted, which you signed.
2. Set Up a Payment Plan
To set up a payment plan, you can contact the IRS by phone or online. They offer an automated service where you can create a plan that suits your financial situation. If the tax amount is over $1000, you are likely to incur penalties and interest. Therefore, it is crucial to act promptly and consider a payment plan.
3. Potential Penalties and Interest
While it is recommended to pay your taxes as soon as possible to avoid penalties, if you cannot make a full payment upfront, you can set up a payment plan. However, be aware that you will be penalized and charged interest for late payment for the period before the plan starts. The amount of the penalty will depend on how long you delay in establishing the plan.
Steps to Follow for Setting Up a Payment Plan
1. **Review Your Tax Return**: Make sure you understand the exact amount you are required to pay based on your tax return. This will help you in setting up a realistic payment plan.
2. **Contact the IRS**: Reach out to the IRS to discuss your options for a payment plan. The IRS has online services and helplines that can guide you through the process. You can navigate to the official IRS web portal for detailed instructions.
3. **Choose a Payment Plan**: Based on your financial situation, select a payment plan that works best for you. There are options such as the Installment Agreement or the Care Credit (available to low-income individuals).
Conclusion
In summary, if your online tax account shows 'Payment Status Unavailable' and you cannot make a full payment upfront, setting up a payment plan is a practical solution. You will certainly face penalties and interest on overdue amounts, so it is important to act quickly and establish a manageable payment plan. Understanding and acting on this information can help you navigate the process smoothly and avoid higher costs in the long run.