Paying the IRS...Loan vs agreement?

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20%Down
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Paying the IRS...Loan vs agreement?

Postby 20%Down » Mon Mar 11, 2013 12:42 pm

I've filed my taxes, and it looks like I owe the IRS around 4400. I am trying to decide between taking a loan out (p2p lending, ABC bank, etc) or do I sign up for the IRS installment agreement?

The problem is I am not able to find a reliable calculator, or description of how the interest and penalties will break out over the life of the agreement to decide which way will cost less...

Any suggestions? :?:

:|

stannius
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Location: Seattle, WA
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Re: Paying the IRS...Loan vs agreement?

Postby stannius » Mon Mar 11, 2013 3:50 pm

According to http://taxes.about.com/od/backtaxes/qt/irs_tax_penalty.htm the interest rate is 4% per year (not bad) but the penalty is 0.5% until the amount is paid in full. It's not clear to me if that is recalculated as you pay it down, or if it's calculated as the starting balance times the total lateness (date of last payment).


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