If you`ve entered into an IRS installment agreement, it may seem like a daunting task to pay off the balance in full earlier than the agreed-upon date. However, paying off your IRS installment agreement early can save you money on interest and potentially improve your credit score. Here are some steps you can take to pay off your IRS installment agreement early:
1. Determine the current balance of your installment agreement. This information can be found on your IRS account transcript or by calling the IRS directly.
2. Review your budget and determine how much extra you can afford to pay each month towards your installment agreement. Consider cutting back on unnecessary expenses or increasing your income through side gigs or freelance work.
3. Make additional payments towards your installment agreement each month. You can make extra payments online, by phone, or by mail. Be sure to specify that the payment is for the principal balance of your installment agreement.
4. Consider paying off the balance using a lump sum payment. If you have the funds available, paying off the balance in full can save you money in interest charges. You can make a payment online, by phone, or by mail.
5. If you`re using automatic payments, consider increasing the amount of your monthly payment. This will help you pay off your installment agreement earlier and potentially save you money in interest charges.
6. Monitor your progress and keep track of your payments. Keep in mind that the IRS charges penalties and interest on late payments, so it`s important to make your payments on time.
Paying off your IRS installment agreement early can be a challenging task, but it`s worth the effort to save money and improve your financial situation. By following these steps and staying disciplined with your budget, you can pay off your balance earlier than expected and achieve financial freedom.