When Do You Pay Instalments on Your Tax Return?
If your agreement covers more than one tax period, select the earliest tax year for which a balance due was assessed. Apply payment to a recently filed original (not amended) return. Your payment satisfies your payment obligation only. Filing your return is a separate process that must be completed.
Can you deduct interest on an installment payment?
Unlike tax breaks that you might get on your mortgage interest and property taxes, you are not allowed to deduct the interest or penalties that are part of an IRS installment agreement. You should be aware of this as you think through whether this kind of payment plan will work for you.
